The following is a summary of the Hilltop Holdings Inc. (HTH) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Reported net income of $30 million, or $0.46 per diluted share, with a return on average assets of 0.8% and return on average equity of 5.5%.

• Faced a quarter-over-quarter improvement in net interest income due to growth in average earning assets, despite the consolidated net interest margin and net interest margin at the bank experiencing modest compression.

• Net interest margin decreased from the previous quarter to 3.05%.

• Consolidated income attributable to common stockholders was $29.7 million, or $0.46 per diluted share.

• Experienced a valuation adjustment related to the signing of an LOI impacting PrimeLending's loan service rights of approximately $4.2 million.

Business Progress:

• PlainsCapital Bank generated $48 million of pre-tax income on $12.8 billion of average assets.

• Average loan at PlainsCapital Bank declined by $40 million primarily due to elevated levels of loan payoffs and a lower pull-through rate, although loan pipeline growth was noted.

• Hilltop Securities generated pre-tax income of $17 million on net revenues of $124 million.

• PrimeLending faced a challenging operating environment, reported a pre-tax loss of $8.7 million, primarily driven by a reduction in origination volume and a decline in the gain on sale margin.

• Hilltop maintains robust capital levels with a common equity Tier 1 capital ratio of 20.5%.

Opportunities:

• Anticipated declining interest rate environment expected to benefit future borrower activity and growth in loan pipelines.

• Increased optimism regarding industry-wide mortgage origination volumes for 2025.

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