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Sep 30, 2023
Hilltop Q3 2023 Earnings Report
Hilltop Holdings' financial performance increased in Q3 2023, driven by growth in net income and EPS.
Key Takeaways
Hilltop Holdings reported a net income of $37 million and EPS of $0.57 for Q3 2023. The results reflect an increase compared to the previous quarter, driven by improved revenues from sweep deposits offsetting challenging fixed income markets.
PlainsCapital Bank generated $53.2 million in pre-tax income, but net interest margin decreased slightly.
PrimeLending experienced an $8.2 million pre-tax loss, but non-interest expense declined significantly.
HilltopSecurities generated a pre-tax income of $21.6 million, driven by improved revenues from sweep deposits.
Consolidated net revenue increased by $4.5 million year-over-year, benefiting from higher short-term interest rates.
Forward Guidance
Hilltop Holdings provided its outlook for the full year 2023, including expectations for loan and deposit growth, net interest income, noninterest income and expense, provision expense, and effective tax rate.
Positive Outlook
- Full year average bank loan growth 2% – 4% (excluding retained mortgages from PrimeLending and mortgage warehouse lending)
- NII growth 2% – 5% driven by higher interest rates
- Mortgage gain on sale margins full year average 195 – 205 bps (third party sales)
- Broker Dealer fees increase 10% – 15%
- Non-variable expenses decrease 5% – 7%
Challenges Ahead
- Full year average total deposits to decline 7% to 10%
- Outlook assumes Fed Funds rate peaks during second half 2023
- Deposit betas 60 – 70% (through the cycle)
- Full year mortgage origination volume $8 – $9 billion
Historical Earnings Impact
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Avg. Return Before/After Earnings
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