Market Overview

Hilltop Holdings Inc. Announces Financial Results for Second Quarter 2018

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Hilltop Holdings Inc. (NYSE:HTH) ("Hilltop") today announced financial
results for the second quarter of 2018. Hilltop produced income of $33.1
million, or $0.35 per diluted share, for the second quarter of 2018,
compared to $62.5 million, or $0.63 per diluted share, for the second
quarter of 2017.

Hilltop also announced that its Board of Directors declared a quarterly
cash dividend of $0.07 per common share, payable on August 31, 2018, to
all common stockholders of record as of the close of business on August
15, 2018. Additionally, pursuant to the stock repurchase program
authorized by the Hilltop Board of Directors in January 2018, Hilltop
has paid $38.8 million to repurchase 1,702,696 shares at an average
price of $22.81 during the first six months of 2018. These shares were
returned to the pool of authorized but unissued shares of common stock.

Furthermore, in July 2018, the Hilltop Board of Directors authorized an
increase to the aggregate amount of common stock the Company may
repurchase under the aforementioned stock repurchase program to $100.0
million, an increase of $50.0 million. The stock repurchase program
expires in January 2019 and is inclusive of repurchases to offset
dilution related to grants of stock-based compensation.

Hilltop also received approval from federal regulators to proceed with
its $85 million, all-cash acquisition of The Bank of River Oaks. The
acquisition was approved by The Bank of River Oaks shareholders on May
10, 2018, and is expected to close on or about August 1, 2018. Once
completed, The Bank of River Oaks will be merged into PlainsCapital
Bank, and all customer accounts are expected to be converted to the
PlainsCapital platform by the end of the year.

Jeremy Ford, Co-CEO of Hilltop, said, "We are very pleased to be moving
forward with the closing of The Bank of River Oaks transaction and are
excited about the strong prospects for future growth in our Houston
franchise. Further, with the combination of dividends and share
repurchases, we returned approximately $44 million to stockholders
during the second quarter. Through strategic M&A, investments in our
businesses to support profitable growth and the prudent return of
capital, we are committed to delivering value for our stockholders."

Alan White, Co-CEO of Hilltop, added, "Our teams are focused on
delivering value to our clients and expanding relationships across the
businesses. PlainsCapital Bank has continued to demonstrate strong
credit quality, solid year-over-year deposit growth and balanced loan
growth in a very competitive marketplace. While challenges in the
mortgage industry persist, our teammates at PrimeLending are delivering
higher market share through our purchase mortgage focused strategy and
the business returned to profitability during the second quarter.
HilltopSecurities' diversified model continues to provide support to the
franchise with revenue growth in its Retail, Clearing and Securities
Lending businesses. National Lloyds' performance for the quarter was
substantially improved from 2017, as storm activity decreased versus
normal seasonal trends."

Second Quarter 2018 Highlights for Hilltop:

  • Hilltop's annualized return on average assets and return on average
    equity for the second quarter of 2018 were 1.03% and 6.95%,
    respectively, compared to 1.94% and 13.24%, respectively, for the
    second quarter of 2017;
  • Hilltop's book value per common share increased to $20.21 at June 30,
    2018, compared to $20.02 at March 31, 2018;
  • Hilltop's total assets were $13.7 billion at June 30, 2018, compared
    to $13.3 billion at March 31, 2018;
  • Non-covered loans1 held for investment, net of allowance
    for loan losses, increased by 2.0% to $5.7 billion and covered loans2,
    net of allowance for loan losses, decreased by 5.2% to $159.0 million
    at June 30, 2018 compared to March 31, 2018;
  • Non-covered non-performing loans increased to $42.0 million, or 0.50%
    of total non-covered loans, at June 30, 2018, compared to $39.4
    million, or 0.52% of total non-covered loans, at March 31, 2018;
  • Energy classified and criticized loans decreased to $17.0 million at
    June 30, 2018, compared to $28.5 million at March 31, 2018;
  • Loans held for sale increased by 38.6% from March 31, 2018 to $2.0
    billion at June 30, 2018;
  • Total deposits were $7.8 billion at June 30, 2018, compared to $8.0
    billion at March 31, 2018;
  • Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio3
    of 12.90% and a Common Equity Tier 1 Capital Ratio of 17.61% at June
    30, 2018;
  • Hilltop's net interest margin4 decreased to 3.46% for the
    second quarter of 2018, compared to 3.52% in the first quarter of 2018;
  • The provision (recovery) for loan losses was $0.3 million during the
    second quarter of 2018, compared to ($1.8) million in the first
    quarter of 2018;
  • For the second quarter of 2018, noninterest income was $279.4 million,
    compared to $344.7 million in the second quarter of 2017, an 18.9%
    decrease. The second quarter of 2017 included significant prior year
    non-recurring items related to the following:
    • The recognition within corporate of a pre-tax net increase to
      other noninterest income of $11.6 million related to the
      resolution of the appraisal proceedings from the SWS Merger; and
    • The Bank recorded an insurance receivable and related increase to
      other noninterest income of $15.0 million from coverage provided
      by an insurance policy for forgery related to a single, large loan
      of $24.5 million previously charged-off during the second quarter
      of 2016;
  • For the second quarter of 2018, noninterest expense was $338.5
    million, compared to $366.3 million in the second quarter of 2017, a
    7.6% decrease; and
  • Hilltop's effective tax rate decreased to 24.3% during the second
    quarter of 2018, compared to 29.1% during the second quarter of 2017,
    and included significant items related to the following:
    • Reduction of the corporate tax rate in 2018 from 35% to 21%
      pursuant to the enactment of the Tax Cuts and Jobs Act of 2017
      ("Tax Legislation"); and
    • Reduction in the second quarter of 2017 due to the previously
      mentioned nontaxable increase to noninterest income related to the
      SWS matter.
______________________________

1

  "Non-covered loans" exclude broker-dealer margin loans.

2

"Covered loans" refer to loans acquired in the FNB Transaction that
are subject to loss-share agreements with the FDIC.

3

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

4

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

Consolidated Financial and Other Information

 
 
Consolidated Balance Sheets     June 30,     March 31,     December 31,     September 30,     June 30,
(in 000's)   2018     2018     2017     2017     2017  
Cash and due from banks $ 353,432 $ 470,127 $ 486,977 $ 354,569 $ 405,938
Federal funds sold 403 400 405 400 388
Securities purchased under agreements to resell 229,172 244,978 186,537 134,654 125,188
Assets segregated for regulatory purposes 128,417 198,170 186,578 207,336 167,565
Securities:
Trading, at fair value 634,197 756,151 730,685 676,411 471,485
Available for sale, at fair value 811,218 806,583 744,319 744,559 742,703
Held to maturity, at amortized cost 353,192 356,452 355,849 368,031 359,847
Equity, at fair value   21,218     20,876     21,241     20,983     20,503  
1,819,825 1,940,062 1,852,094 1,809,984 1,594,538
Loans held for sale 1,953,562 1,409,634 1,715,357 1,939,321 2,000,257
Non-covered loans, net of unearned income 6,384,660 6,216,809 6,273,669 6,148,813 6,118,211
Allowance for non-covered loan losses   (59,996 )   (60,371 )   (60,957 )   (58,779 )   (59,208 )
Non-covered loans, net 6,324,664 6,156,438 6,212,712 6,090,034 6,059,003
 
Covered loans, net of allowance for covered loan losses 158,996 167,781 179,400 188,269 205,877
Broker-dealer and clearing organization receivables 1,614,951 1,660,720 1,464,378 1,672,123 1,552,525
Premises and equipment, net 172,911 173,637 177,577 176,281 183,994
FDIC indemnification asset 23,525 25,458 29,340 33,143 40,304
Covered other real estate owned 34,895 35,777 36,744 40,343 42,304
Other assets 589,897 576,567 549,447 596,095 618,368
Goodwill 251,808 251,808 251,808 251,808 251,808
Other intangible assets, net   32,716     34,569     36,432     38,440     40,516  
Total assets $ 13,689,174   $ 13,346,126   $ 13,365,786   $ 13,532,800   $ 13,288,573  
 
Deposits:
Non interest-bearing $ 2,468,332 $ 2,565,825 $ 2,411,849 $ 2,279,633 $ 2,251,208
Interest-bearing   5,345,290     5,393,897     5,566,270     5,383,814     5,323,414  
Total deposits 7,813,622 7,959,722 7,978,119 7,663,447 7,574,622
Broker-dealer and clearing organization payables 1,409,904 1,504,172 1,287,563 1,517,698 1,395,314
Short-term borrowings 1,610,735 1,064,325 1,206,424 1,477,201 1,515,069
Securities sold, not yet purchased, at fair value 251,581 255,551 232,821 173,509 149,869
Notes payable 227,736 202,700 208,809 300,196 300,283
Junior subordinated debentures 67,012 67,012 67,012 67,012 67,012
Other liabilities   392,171     367,188     470,231     424,381     393,351  
Total liabilities 11,772,761 11,420,670 11,450,979 11,623,444 11,395,520
 
Common stock 946 960 960 959 963
Additional paid-in capital 1,502,105 1,526,867 1,526,369 1,525,169 1,529,903
Accumulated other comprehensive income (loss) (11,846 ) (9,698 ) (394 ) 2,585 2,112
Retained earnings 419,683 404,260 384,545 376,873 356,564
Deferred compensation employee stock trust, net 857 857 848 840 845
Employee stock trust   (252 )   (254 )   (247 )   (241 )   (248 )
Total Hilltop stockholders' equity 1,911,493 1,922,992 1,912,081 1,906,185 1,890,139
Noncontrolling interests   4,920     2,464     2,726     3,171     2,914  
Total stockholders' equity   1,916,413     1,925,456     1,914,807     1,909,356     1,893,053  
Total liabilities & stockholders' equity $ 13,689,174   $ 13,346,126   $ 13,365,786   $ 13,532,800   $ 13,288,573  
 
 
    Three Months Ended
Consolidated Income Statements June 30,     March 31,     December 31,     September 30,     June 30,
(in 000's, except per share data) 2018 2018 2017 2017 2017
Interest income:
Loans, including fees $ 103,924 $ 99,944 $ 105,658 $ 102,546 $ 113,793
Securities borrowed 17,486 16,300 11,994 11,404 9,597
Securities:
Taxable 12,516 10,953 10,824 10,214 8,833
Tax-exempt 1,697 1,772 1,717 1,471 1,375
Other   4,417   4,391     3,472   3,309   2,708
Total interest income 140,040 133,360 133,665 128,944 136,306
 
Interest expense:
Deposits 10,136 8,675 7,700 6,841 5,464
Securities loaned 15,075 13,739 9,581 8,935 7,481
Short-term borrowings 6,466 4,043 4,118 4,567 3,648
Notes payable 2,437 2,497 2,611 2,680 2,826
Junior subordinated debentures 918 822 787 774 744
Other   160   164     176   167   167
Total interest expense 35,192 29,940 24,973 23,964 20,330
 
Net interest income 104,848 103,420 108,692 104,980 115,976
Provision (recovery) for loan losses   340   (1,807 )   5,453   1,260   5,853
Net interest income after provision (recovery) for loan losses 104,508 105,227 103,239 103,720 110,123
 
Noninterest income:
Net gains from sale of loans and other mortgage production income 132,478 105,767 122,132 138,498 153,688
Mortgage loan origination fees 29,318 20,626 23,156 25,256 25,976
Securities commissions and fees 38,320 38,717 40,868 38,735 37,804
Investment and securities advisory fees and commissions 21,965 18,354 36,561 25,620 25,537
Net insurance premiums earned 34,105 34,315 35,645 34,493 36,020
Other   23,248   17,364     32,094   35,875   65,667
Total noninterest income 279,434 235,143 290,456 298,477 344,692
 
Noninterest expense:
Employees' compensation and benefits 200,632 182,600 205,642 209,747 214,719
Occupancy and equipment, net 27,893 27,830 29,658 29,073 27,919
Professional services 26,020 24,704 24,220 25,560 26,696
Loss and loss adjustment expenses 24,409 15,532 8,583 31,234 33,184
Other   59,563   57,536     60,567   58,228   63,733
Total noninterest expense 338,517 308,202 328,670 353,842 366,251
 
Income before income taxes 45,425 32,168 65,025 48,355 88,564
Income tax expense   11,034   7,488     51,350   18,003   25,754
Net income 34,391 24,680 13,675 30,352 62,810
Less: Net income attributable to noncontrolling interest   1,311   239     247   146   334
Income attributable to Hilltop $ 33,080 $ 24,441   $ 13,428 $ 30,206 $ 62,476
 
Earnings per common share:
Basic $ 0.35 $ 0.25 $ 0.14 $ 0.31 $ 0.64
Diluted $ 0.35 $ 0.25 $ 0.14 $ 0.31 $ 0.63
 
Cash dividends declared per common share $ 0.07 $ 0.07 $ 0.06 $ 0.06 $ 0.06
 
Weighted average shares outstanding:
Basic 95,270 95,985 95,903 96,096 98,154
Diluted 95,358 96,146 96,080 96,306 98,414
 
 
    Three Months Ended June 30, 2018
Segment Results         Mortgage             All Other and     Hilltop
(in 000's) Banking Broker-Dealer Origination Insurance Corporate Eliminations Consolidated
Net interest income (expense) $ 87,958 $ 12,890 $ 704 $ 793 $ (2,482 ) $ 4,985 $ 104,848
Provision for loan losses 340 340
Noninterest income 10,644 73,589 162,759 36,546 1,436 (5,540 ) 279,434
Noninterest expense   65,542   77,967   150,026   39,712     5,340     (70 )   338,517
Income (loss) before income taxes $ 33,060 $ 8,172 $ 13,437 $ (2,373 ) $ (6,386 ) $ (485 ) $ 45,425
 
 
    Three Months Ended
June 30,     March 31,     December 31,     September 30,     June 30,
Selected Financial Data 2018 2018 2017 2017 2017
 

Hilltop Consolidated:

Return on average stockholders' equity (1) 6.95 % 5.19 % 2.78 % 6.32 % 13.24 %
Return on average assets (1) 1.03 % 0.77 % 0.41 % 0.90 % 1.94 %
Net interest margin (2) (3) 3.46 % 3.52 % 3.57 % 3.44 % 3.98 %
Net interest margin (taxable equivalent) (3) (4):
As reported 3.47 % 3.53 % 3.59 % 3.46 % 3.99 %
Impact of purchase accounting 29 bps 36 bps 43 bps 37 bps 82 bps
Book value per common share ($) 20.21 20.02 19.92 19.88 19.62
Shares outstanding, end of period (000's) 94,571 96,048 95,982 95,904 96,333
Dividend payout ratio (1) (5) 20.16 % 27.49 % 42.86 % 19.09 % 9.43 %
 

Banking Segment:

Net interest margin (2) 4.11 % 4.15 % 4.23 % 4.03 % 4.80 %
Net interest margin (taxable equivalent) (4):
As reported 4.12 % 4.16 % 4.24 % 4.05 % 4.81 %
Impact of purchase accounting 42 bps 51 bps 60 bps 51 bps 112 bps
Accretion of discount on loans ($000's) 8,343 9,867 12,642 10,541 23,164
Non-covered net charge-offs (recoveries) ($000's) 1,510 (1,312 ) 4,635 908 842
Return on average assets (1) 1.09 % 1.31 % -0.08 % 0.94 % 1.63 %
Fee income ratio 10.79 % 10.51 % 10.22 % 11.33 % 19.97 %
Efficiency ratio 66.47 % 61.32 % 60.18 % 62.29 % 48.96 %
Employees' compensation and benefits ($000's) 32,442 30,811 31,159 30,810 31,790
 

Broker-Dealer Segment:

Net revenue (6) 86,479 81,097 114,326 103,633 103,159
Employees' compensation and benefits ($000's) 52,418 52,265 70,169 60,365 62,840
Variable compensation expense ($000's) 26,036 24,594 41,239 35,085 36,556
Compensation as a % of net revenue 60.6 % 64.4 % 61.4 % 58.2 % 60.9 %
Pre-tax margin 9.45 % 4.44 % 16.73 % 19.49 % 15.33 %
 

Mortgage Origination Segment:

Mortgage loan originations - volume ($000's):
Home purchases 3,615,991 2,358,692 2,870,864 3,332,441 3,502,128
Refinancings 491,384   601,105   732,129   640,064   555,956  
Total mortgage loan originations - volume 4,107,375 2,959,797 3,602,993 3,972,505 4,058,084
Mortgage loan sales - volume ($000's) 3,526,603 3,185,438 3,791,638 4,002,195 3,385,260
Mortgage servicing rights asset ($000's) (7) 57,373 63,957 54,714 47,766 43,580
Employees' compensation and benefits ($000's) 111,713 91,059 96,257 111,133 115,189
Variable compensation expense ($000's) (8) 66,531 46,292 57,434 64,956 69,445
 

Insurance Segment:

Loss and LAE ratio 71.6 % 45.3 % 24.1 % 90.6 % 92.1 %
Expense ratio 39.5 % 39.9 % 41.0 % 40.4 % 39.7 %
Combined ratio 111.1 % 85.2 % 65.1 % 131.0 % 131.8 %
Employees' compensation and benefits ($000's) 2,954 3,255 3,418 2,578 2,786

______________________________

(1)   Noted measures during the three months 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 June 30, 2018 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) Noted measures during the 2017 periods presented reflect certain
category reclassifications within the detailed calculations to
conform with the current period presentation.
(4) 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 the 2018 periods and
35% federal income tax rate for the 2017 periods. 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 $0.2
million, $0.3 million, $0.6 million, $0.6 million, and $0.5 million,
respectively, and for the Banking Segment were $0.2 million, $0.2
million, $0.4 million, $0.4 million, and $0.4 million, respectively.
(5) Dividend payout ratio is defined as cash dividends declared per
common share divided by basic earnings per common share.
(6) Net revenue is defined as the sum of total broker-dealer net
interest income plus total broker-dealer noninterest income.
(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.
(8) Noted measure during the 2017 periods presented reflects certain
category reclassifications that affect variable compensation expense
to conform with the current period presentation.
 
 
    June 30,     March 31,     December 31,     September 30,     June 30,
Capital Ratios 2018 2018 2017 2017 2017
Tier 1 capital (to average assets):
PlainsCapital 12.80 % 13.01 % 12.32 % 12.18 % 12.11 %
Hilltop 12.90 % 13.26 % 12.94 % 12.87 % 13.07 %
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital 14.59 % 15.39 % 14.47 % 14.44 % 13.95 %
Hilltop 17.61 % 18.60 % 17.71 % 17.66 % 17.53 %
Tier 1 capital (to risk-weighted assets):
PlainsCapital 14.59 % 15.39 % 14.47 % 14.44 % 13.95 %
Hilltop 18.10 % 19.11 % 18.24 % 18.20 % 18.07 %
Total capital (to risk-weighted assets):
PlainsCapital 15.38 % 16.25 % 15.29 % 15.23 % 14.72 %
Hilltop 18.58 % 19.63 % 18.78 % 18.71 % 18.57 %
 
 
    June 30,     March 31,     December 31,     September 30,     June 30,
Non-Covered Non-Performing Loans Portfolio Data 2018 2018 2017 2017 2017
 
Non-covered loans accounted for on a non-accrual basis ($000's):
Commercial and industrial 22,815 20,768 20,878 21,434 13,818
Real estate 18,529 17,971 18,978 17,996 14,877
Construction and land development 569 595 611 626 632
Consumer 49 52 56 63 208
Broker-dealer          
41,962 39,386 40,523 40,119 29,535
 
Non-covered non-performing loans as a % of total non-covered loans 0.50 % 0.52 % 0.51 % 0.50 % 0.36 %
 
Non-covered other real estate owned ($000's) 2,929 2,577 3,883 4,827 4,591
 
Other repossessed assets ($000's) 168 246 323 437 723
 
Non-covered non-performing assets ($000's) 45,059 42,209 44,729 45,383 34,849
 
Non-covered non-performing assets as a % of total assets 0.33 % 0.32 % 0.33 % 0.34 % 0.26 %
 
Non-covered non-PCI loans past due 90 days or more and still
accruing ($000's)
74,060 77,590 85,113 45,134 48,757
 
Troubled debt restructurings included in accruing non-covered loans
($000's)
1,111 1,123 1,150 1,163 1,170
 
 
    Three Months Ended June 30,
2018     2017
Average     Interest     Annualized Average     Interest     Annualized
Outstanding Earned or Yield or Outstanding Earned or Yield or
Net Interest Margin (Taxable Equivalent) Details Balance Paid Rate Balance Paid Rate
Assets
Interest-earning assets
Loans held for sale $ 1,589,149 $ 18,241 4.59 % $ 1,672,968 $ 18,021 4.31 %
Loans held for investment, gross (1) 6,374,873 85,683 5.34 % 6,121,332 95,772 6.22 %
Investment securities - taxable 1,663,257 12,486 3.00 % 1,399,402 8,811 2.52 %
Investment securities - non-taxable (2) 252,591 1,912 3.03 % 232,340 1,903 3.28 %
Federal funds sold and securities purchased under agreements to
resell
228,786 859 1.51 % 147,179 242 0.66 %
Interest-bearing deposits in other financial institutions 419,006 1,890 1.81 % 550,716 1,375 1.00 %
Securities borrowed 1,544,235 17,486 4.48 % 1,512,222 9,597 2.51 %
Other   69,297     1,691 9.77 %   81,230     1,113 5.49 %
Interest-earning assets, gross (2) 12,141,194 140,248 4.59 % 11,717,389 136,834 4.65 %
Allowance for loan losses   (63,944 )   (57,976 )
Interest-earning assets, net 12,077,250 11,659,413
Noninterest-earning assets   1,286,608     1,359,404  
Total assets $ 13,363,858   $ 13,018,817  
 
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits $ 5,366,535 $ 10,136 0.76 % $ 5,140,116 $ 5,464 0.43 %
Securities loaned 1,382,984 15,075 4.37 % 1,388,897 7,481 2.16 %
Notes payable and other borrowings   1,588,132     9,981 2.51 %   1,708,241     7,385 1.72 %
Total interest-bearing liabilities 8,337,651 35,192 1.69 % 8,237,254 20,330 0.99 %
Noninterest-bearing liabilities
Noninterest-bearing deposits 2,492,253 2,273,533
Other liabilities   620,900     612,712  
Total liabilities 11,450,804 11,123,499
Stockholders' equity 1,910,316 1,893,052
Noncontrolling interest   2,738     2,266  
Total liabilities and stockholders' equity $ 13,363,858   $ 13,018,817  
   
Net interest income (2) $ 105,056 $ 116,504
Net interest spread (2) 2.90 % 3.66 %
Net interest margin (2) 3.47 % 3.99 %

______________________________

(1)   Average balance includes non-accrual loans.
(2) Presented on a taxable equivalent basis with annualized taxable
equivalent adjustments based on the applicable 21% federal income
tax rate for the three months ended June 30, 2018 and 35% federal
income tax rate for the three months ended June 30, 2017. The
adjustment to interest income was $0.2 million and $0.5 million for
the three months ended June 30, 2018 and 2017, respectively.
 
 

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central
(9:00 AM Eastern) on Friday, July 27, 2018. Hilltop Co-CEOs Jeremy B.
Ford and Alan B. White and other key management members will review
second quarter 2018 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 June 30, 2018, Hilltop employed
approximately 5,400 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,
strategic acquisitions 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. Factors that could cause our actual
results to differ materially from those described in the forward-looking
statements include, among others: (i) the possibility that any of the
anticipated benefits of the proposed transaction with BORO will not be
realized or will not be realized within the expected time period or that
the transaction may be more expensive to complete than anticipated; (ii)
the failure of the proposed transaction with BORO to close on the
expected timeline or at all; and (iii) the ability to meet closing
conditions to the acquisition of BORO. For a discussion of certain other
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.

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