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8-K - 8-K - Hilltop Holdings Inc.hth-20151102x8k.htm

Exhibit 99.1

 

 

 

 

Investor Relations Contact:

 

Isabell Novakov

 

214-252-4029

 

inovakov@plainscapital.com

 

Hilltop Holdings Inc. Announces Financial Results for Third Quarter 2015

DALLAS  (BUSINESS WIRE) November 2, 2015 — Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the third quarter of 2015. Hilltop produced income to common stockholders of $46.9 million, or $0.47 per diluted share, for the third quarter of 2015, compared to $23.4 million, or $0.26 per diluted share, for the third quarter of 2014. Hilltop’s annualized return on average assets and return on average equity for the third quarter of 2015 were 1.49% and 10.97%, respectively. The return on average assets and return on average equity for the third quarter of 2014 were 1.03% and 6.51%, respectively.

Jeremy Ford, CEO of Hilltop, said, “We are excited to report another successful quarter as each of our operating segments contributed profitably. PlainsCapital Bank achieved an ROAA of 1.64%, driven by a strong net interest margin and improved efficiency ratio. The bank’s net interest margin was bolstered through continued favorable resolution of problem assets from the FNB Transaction. PrimeLending experienced a healthy 24% increase in its mortgage loan origination volume. National Lloyds improved its underwriting profitability with a 75.4% combined ratio.”

Mr. Ford continued, “We are pleased to report FINRA’s recent approval to merge our two broker-dealers, a critical milestone in our drive towards full integration. Additionally, Southwest Securities, Inc. was renamed Hilltop Securities Inc. in preparation of the merger with First Southwest. The executive team and employees of our broker-dealer segment have worked diligently throughout 2015 to build the foundation of a leading regional franchise.”

Third Quarter 2015 Highlights for Hilltop:

·

Hilltop’s total assets were  $12.4 billion at September 30,  2015, compared to $12.5 billion at June 30,  2015;

·

Hilltop’s common equity increased by $41.5 million from June 30,  2015 to $1.7  billion at September 30,  2015;

·

Non-covered loans1 held for investment, net of allowance for loan losses, increased by 0.8% to $5.0 billion, and covered loans1, net of allowance for loan losses, decreased by 14.7% to $420.5 million from June 30,  2015 to September 30,  2015;

·

Loans held for sale were stable at  $1.4 billion at September 30,  2015;

·

Total deposits increased by $24.3 million from June 30,  2015 to $6.8 billion at September 30,  2015;

·

Hilltop was well-capitalized with a Tier 1 Leverage Ratio2 of 12.01% and Total Capital Ratio of 19.29% at September 30,  2015; and

·

Hilltop continues to retain approximately  $41.1 million of freely usable cash, as well as excess capital at its subsidiaries, at September  30,  2015.


1 “Covered loans” refers 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.”

2 Based on the end of period Tier 1 capital divided by total average assets during the third quarter of 2015, excluding goodwill and intangible assets.

 

For the third quarter of 2015, consolidated taxable equivalent net interest income was $116.0 million compared with $86.3 million in the third quarter of 2014, a 34.3%  increase.  The consolidated taxable equivalent net interest margin was 4.20%  for the third quarter of 2015, an 18 basis point decrease from 4.38% in the third quarter of 2014. During the third

 

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quarter of 2015,  the consolidated taxable equivalent net interest margin was 137 basis points greater due to the impact of purchase accounting, which was primarily related to accretion of discount on loans of $2.2 million, $25.7 million and $8.1 million associated with the PlainsCapital Merger, FNB Transaction, and SWS Merger, respectively, and PlainsCapital Merger-related amortization of premium on acquired securities of $0.7 million. During the third quarter of 2014,  the consolidated taxable equivalent net interest margin was 87 basis points greater due to the impact of purchase accounting, which was primarily related to accretion of discount on loans of $4.6 million and $11.0 million associated with PlainsCapital Merger and FNB Transaction, respectively, PlainsCapital Merger-related amortization of premium on acquired securities of $0.9 million, and FNB Transaction-related amortization of premium on acquired time deposits of $0.9 million. Moreover, the consolidated taxable equivalent net interest margin was 99 basis points lower due to the impact of securities financing operations within our broker-dealer segment during the three months ended September 30, 2015. During the third quarter of 2015, the banking segment’s taxable equivalent net interest margin of 5.79% was 210 basis points greater due to the impact of purchase accounting.

For the third quarter of 2015, noninterest income was $296.5 million compared to $212.1 million in the third quarter of 2014, a 39.8% increase. Net gains from sale of loans, other mortgage production income and mortgage loan origination fees increased $33.7 million from the third quarter of 2014 to $160.0 million in the third quarter of 2015. Total mortgage loan origination volume increased 23.5% to $3.6 billion during the three months ended September 30, 2015 compared to $2.9 billion during the three months ended September 30, 2014. Home purchases volume represented 80.9% of total mortgage loan origination volume during the third quarter of 2015. Net insurance premiums earned remained flat at $41.2 million in the third quarter of 2015 compared to $41.8 million in the third quarter of 2014. Advisory fees and commissions from our broker-dealer segment increased $42.7 million to $66.7 million in the third quarter of 2015 compared to the third quarter of 2014, primarily due to the operations acquired in the SWS Merger as well as increased volumes in our non-profit housing program (U.S. Agency to-be-announced, or TBA, business) and higher revenues from advising public finance clients.

For the third quarter of 2015, noninterest expense was $333.5 million compared to $254.7 million in the third quarter of 2014, a 30.9%  increase.  Employees’ compensation and benefits increased $74.1 million, or 58.6%, to $200.6  million in the third quarter of 2015,  primarily due to operations acquired in the SWS Merger as well as increased variable compensation tied to the mortgage origination and broker-dealer segments. Loss and loss adjustment expenses decreased to $17.3 million in the third quarter of 2015 from $22.6 million in the third quarter of 2014, while policy acquisition and other underwriting expenses increased to $11.8  million during the third quarter of 2015 compared to $11.6 million in the same quarter a year ago.  Occupancy and equipment expense increased by $4.0 million from the third quarter of 2014 to $29.3 million in the third quarter of 2015.  Amortization of identifiable intangibles from purchase accounting was $2.7  million for the third quarter of 2015. In connection with the SWS Merger, during the nine months ended September 30, 2015, we incurred $17.2 million in pre-tax transaction and integration costs, consisting of $10.3 million in the broker-dealer segment, $3.0  million in the banking segment and $3.9 million within corporate.

For the third quarter of 2015, the provision for loan losses was $5.6 million, compared to $4.0 million for the third quarter of 2014.  During the third quarter of 2015, the provision was comprised of charges relating to newly originated loans and acquired loans without credit impairment at acquisition of  $5.1 million and purchased credit impaired loans of $0.5 million.  Net charge-offs on non-covered loans for the third quarter of 2015 were $1.8 million, and the allowance for non-covered loan losses was $43.0 million, or 0.86%  of total non-covered loans at September 30,  2015. Non-covered, non-performing assets at September 30,  2015 were $30.0 million, or 0.24% of total assets.

 

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Stock Repurchase Program

During the second quarter of 2015, our Board of Directors approved a stock repurchase program under which it authorized us to repurchase, in the aggregate, up to $30.0 million of our outstanding common stock. Under the stock repurchase program authorized, we were allowed to repurchase shares in the open-market or through privately negotiated transactions as permitted under Rule 10b-18 promulgated under the Securities Exchange Act of 1934. As of September 30, 2015, we had repurchased an aggregate of $30.0 million of our outstanding common stock, and do not intend to make any future purchases of our common stock under this program. The extent to which we repurchased our shares and the timing of such repurchases depended upon market conditions and other corporate considerations, as determined by Hilltop’s management team. The purchases were funded from available cash balances. During the three and nine months ended September 30, 2015, we paid $13.0 million and $30.0 million, respectively, to repurchase and retire an aggregate of 1,390,977 shares of common stock at an average price of $21.56 per share. These retired shares were returned to our pool of authorized but unissued shares of common stock.

Condensed Financial and Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Balance Sheets

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

($000s)

    

2015

    

2015

    

2015

    

2014

    

2014

Cash and due from banks

 

 

526,692

 

 

583,043

 

 

694,108

 

 

782,473

 

 

635,933

Securities

 

 

1,323,866

 

 

1,341,852

 

 

1,363,157

 

 

1,109,461

 

 

1,332,342

Loans held for sale

 

 

1,354,107

 

 

1,397,617

 

 

1,215,308

 

 

1,309,693

 

 

1,272,813

Non-covered loans, net of unearned income

 

 

4,999,529

 

 

4,956,969

 

 

4,834,687

 

 

3,920,476

 

 

3,768,843

Allowance for non-covered loan losses

 

 

(42,989)

 

 

(40,484)

 

 

(39,365)

 

 

(37,041)

 

 

(39,027)

Non-covered loans, net

 

 

4,956,540

 

 

4,916,485

 

 

4,795,322

 

 

3,883,435

 

 

3,729,816

Covered loans, net of allowance for loan losses

 

 

420,547

 

 

493,299

 

 

550,626

 

 

638,029

 

 

747,514

Broker-dealer and clearing organization receivables

 

 

2,111,864

 

 

2,070,770

 

 

2,222,517

 

 

167,884

 

 

223,679

Covered other real estate owned

 

 

106,024

 

 

125,510

 

 

137,703

 

 

136,945

 

 

126,798

FDIC indemnification asset

 

 

92,902

 

 

102,381

 

 

107,567

 

 

130,437

 

 

149,788

Premises and equipment, net

 

 

204,273

 

 

206,411

 

 

215,684

 

 

206,991

 

 

205,734

Other assets

 

 

1,292,641

 

 

1,242,142

 

 

1,261,055

 

 

877,068

 

 

755,985

Total assets

 

 

12,389,456

 

 

12,479,510

 

 

12,563,047

 

 

9,242,416

 

 

9,180,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

6,820,749

 

 

6,796,437

 

 

7,129,277

 

 

6,369,892

 

 

6,236,282

Broker-dealer and clearing organization payables

 

 

2,045,604

 

 

2,048,176

 

 

1,951,040

 

 

179,042

 

 

243,835

Short-term borrowings

 

 

910,490

 

 

1,100,025

 

 

999,476

 

 

762,696

 

 

845,984

Notes payable

 

 

243,556

 

 

245,420

 

 

108,682

 

 

56,684

 

 

55,684

Other liabilities

 

 

652,229

 

 

614,188

 

 

593,780

 

 

412,863

 

 

374,873

Total liabilities

 

 

10,672,628

 

 

10,804,246

 

 

10,782,255

 

 

7,781,177

 

 

7,756,658

Total Hilltop stockholders' equity

 

 

1,715,690

 

 

1,674,145

 

 

1,779,916

 

 

1,460,452

 

 

1,422,975

Noncontrolling interest

 

 

1,138

 

 

1,119

 

 

876

 

 

787

 

 

769

Total liabilities & stockholders' equity

 

 

12,389,456

 

 

12,479,510

 

 

12,563,047

 

 

9,242,416

 

 

9,180,402

 

 

 

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Three Months Ended

 

Condensed Income Statements

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

($000s)

    

2015

    

2015

    

2015

    

2014

    

2014

 

Interest income

 

 

130,545

 

 

115,662

 

 

107,669

 

 

99,316

 

 

93,217

 

Interest expense

 

 

15,334

 

 

14,995

 

 

14,277

 

 

7,802

 

 

7,457

 

Net interest income

 

 

115,211

 

 

100,667

 

 

93,392

 

 

91,514

 

 

85,760

 

Provision for loan losses

 

 

5,593

 

 

158

 

 

2,687

 

 

4,125

 

 

4,033

 

Net interest income after provision for loan losses

 

 

109,618

 

 

100,509

 

 

90,705

 

 

87,389

 

 

81,727

 

Noninterest income

 

 

296,469

 

 

301,400

 

 

352,845

 

 

213,795

 

 

212,135

 

Noninterest expense

 

 

333,502

 

 

353,317

 

 

314,476

 

 

246,768

 

 

254,744

 

Income before income taxes

 

 

72,585

 

 

48,592

 

 

129,074

 

 

54,416

 

 

39,118

 

Income tax expense

 

 

25,338

 

 

18,137

 

 

15,420

 

 

20,950

 

 

14,010

 

Net income

 

 

47,247

 

 

30,455

 

 

113,654

 

 

33,466

 

 

25,108

 

Less: Net income attributable to noncontrolling interest

 

 

353

 

 

405

 

 

353

 

 

325

 

 

296

 

Income attributable to Hilltop

 

 

46,894

 

 

30,050

 

 

113,301

 

 

33,141

 

 

24,812

 

Dividends on preferred stock

 

 

 —

 

 

428

 

 

1,426

 

 

1,425

 

 

1,426

 

Income applicable to Hilltop common stockholders

 

 

46,894

 

 

29,622

 

 

111,875

 

 

31,716

 

 

23,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

Selected Financial Data

    

2015

    

2015

    

2015

    

2014

    

2014

 

Return on average stockholders' equity

 

 

10.97%

 

 

7.12%

 

 

26.76%

 

 

8.55%

 

 

6.51%

 

Return on average assets

 

 

1.49%

 

 

0.97%

 

 

3.64%

 

 

1.42%

 

 

1.03%

 

Net interest margin (taxable equivalent)

 

 

4.20%

 

 

3.75%

 

 

3.53%

 

 

4.72%

 

 

4.38%

 

Earnings per common share ($):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

0.47

 

 

0.30

 

 

1.12

 

 

0.35

 

 

0.26

 

Diluted

 

 

0.47

 

 

0.30

 

 

1.11

 

 

0.35

 

 

0.26

 

Weighted average shares outstanding (000's):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

98,676

 

 

99,486

 

 

99,741

 

 

89,713

 

 

89,711

 

Diluted

 

 

99,556

 

 

100,410

 

 

100,627

 

 

90,560

 

 

90,558

 

Book value per share ($)

 

 

17.35

 

 

16.82

 

 

16.61

 

 

14.93

 

 

14.51

 

Shares outstanding (000's)

 

 

98,893

 

 

99,515

 

 

100,286

 

 

90,182

 

 

90,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

Capital Ratios

    

2015

    

2015

    

2015

    

2014

    

2014

 

Tier 1 capital (to average quarterly assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

12.77%

 

 

12.17%

 

 

11.34%

 

 

10.31%

 

 

9.95%

 

Hilltop

 

 

12.01%

 

 

11.87%

 

 

12.68%

 

 

14.17%

 

 

13.63%

 

Common Equity Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

17.36%

 

 

16.46%

 

 

16.46%

 

 

NA

 

 

NA

 

Hilltop

 

 

18.36%

 

 

18.02%

 

 

18.05%

 

 

NA

 

 

NA

 

Tier 1 capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

17.36%

 

 

16.46%

 

 

16.46%

 

 

13.74%

 

 

13.48%

 

Hilltop

 

 

18.89%

 

 

18.74%

 

 

20.26%

 

 

19.02%

 

 

18.57%

 

Total capital (to risk-weighted assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

 

18.13%

 

 

17.17%

 

 

17.19%

 

 

14.45%

 

 

14.21%

 

Hilltop

 

 

19.29%

 

 

19.29%

 

 

20.82%

 

 

19.69%

 

 

19.28%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Results ($000s)

    

 

 

    

 

    

Mortgage

    

 

    

 

 

    

All Other and

    

Hilltop

 

Three Months Ended September 30, 2015

 

Banking

 

Broker-Dealer

 

Origination

 

Insurance

 

Corporate

 

Eliminations

 

Consolidated

 

Net interest income (expense)

 

$

105,758

 

$

8,301

 

$

(2,538)

 

$

838

 

$

(1,799)

 

$

4,651

 

$

115,211

 

Provision for loan losses

 

 

5,615

 

 

(22)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

5,593

 

Noninterest income

 

 

13,935

 

 

83,817

 

 

159,794

 

 

43,534

 

 

 —

 

 

(4,611)

 

 

296,469

 

Noninterest expense

 

 

60,518

 

 

90,683

 

 

145,113

 

 

32,366

 

 

6,028

 

 

(1,206)

 

 

333,502

 

Income (loss) before income taxes

 

$

53,560

 

$

1,457

 

$

12,143

 

$

12,006

 

$

(7,827)

 

$

1,246

 

$

72,585

 

 

 

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Three Months Ended September 30,

 

 

 

2015

 

2014

 

 

    

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)

 

$

6,636,328

 

$

111,315

 

6.64

%  

$

5,641,750

 

$

80,719

 

5.65

%  

Investment securities - taxable

 

 

1,110,813

 

 

6,243

 

2.24

%  

 

1,161,583

 

 

7,688

 

2.63

%  

Investment securities - non-taxable (2)

 

 

253,170

 

 

2,439

 

3.85

%  

 

185,394

 

 

1,731

 

3.74

%  

Federal funds sold and securities purchased under agreements to resell

 

 

122,826

 

 

20

 

0.07

%  

 

14,459

 

 

10

 

0.29

%  

Interest-bearing deposits in other financial institutions

 

 

442,689

 

 

237

 

0.21

%  

 

566,195

 

 

303

 

0.21

%  

Other

 

 

2,381,905

 

 

11,047

 

1.82

%  

 

258,325

 

 

3,347

 

5.13

%  

Interest-earning assets, gross

 

 

10,947,731

 

 

131,301

 

4.74

%  

 

7,827,706

 

 

93,798

 

4.74

%  

Allowance for loan losses

 

 

(43,446)

 

 

 

 

 

 

 

(40,934)

 

 

 

 

 

 

Interest-earning assets, net

 

 

10,904,285

 

 

 

 

 

 

 

7,786,772

 

 

 

 

 

 

Noninterest-earning assets

 

 

1,706,720

 

 

 

 

 

 

 

1,290,543

 

 

 

 

 

 

Total assets

 

$

12,611,005

 

 

 

 

 

 

$

9,077,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

4,709,244

 

$

3,719

 

0.31

%  

$

4,265,012

 

$

4,117

 

0.38

%  

Notes payable and other borrowings

 

 

3,385,804

 

 

11,615

 

1.36

%  

 

1,168,461

 

 

3,340

 

1.12

%  

Total interest-bearing liabilities

 

 

8,095,048

 

 

15,334

 

0.75

%  

 

5,433,473

 

 

7,457

 

0.54

%  

Noninterest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

2,177,319

 

 

 

 

 

 

 

1,891,576

 

 

 

 

 

 

Other liabilities

 

 

641,456

 

 

 

 

 

 

 

338,825

 

 

 

 

 

 

Total liabilities

 

 

10,913,823

 

 

 

 

 

 

 

7,663,874

 

 

 

 

 

 

Stockholders’ equity

 

 

1,696,396

 

 

 

 

 

 

 

1,412,913

 

 

 

 

 

 

Noncontrolling interest

 

 

786

 

 

 

 

 

 

 

528

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

12,611,005

 

 

 

 

 

 

$

9,077,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (2)

 

 

 

 

$

115,967

 

 

 

 

 

 

$

86,341

 

 

 

Net interest spread (2)

 

 

 

 

 

 

 

3.99

%  

 

 

 

 

 

 

4.20

%  

Net interest margin (2)

 

 

 

 

 

 

 

4.20

%  

 

 

 

 

 

 

4.38

%  


(1) Average balance includes non-accrual loans.

(2) Annualized taxable equivalent adjustments are based on a 35% tax rate. The adjustment to interest income was $0.8 million and $0.6  million for the three months ended September 30,  2015 and 2014, respectively.

 

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern), Tuesday, November 3, 2015. Hilltop President and CEO Jeremy B. Ford and other key management members will discuss results for the third quarter of 2015. 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. Through its wholly owned subsidiary, PlainsCapital Corporation, a regional commercial banking franchise, it has two operating subsidiaries: PlainsCapital Bank and PrimeLending. Under Hilltop Securities Holdings LLC, First Southwest, Hilltop Securities Inc. (formerly Southwest Securities) and Hilltop Securities Independent Network Inc. (formerly SWS Financial Services) 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

 

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American Summit Insurance Company. At September 30, 2015, Hilltop employed approximately 5,400 people and operated approximately 425 locations in 44 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, Firstsw.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 business strategy, our financial condition, our litigation, our efforts to make strategic acquisitions, our recent acquisition of SWS Group, Inc. (“SWS”) and integration thereof, our revenue, our liquidity and sources of funding, market trends, operations and business, expectations concerning mortgage loan origination volume, expected losses on covered loans and related reimbursements from the Federal Deposit Insurance Corporation (“FDIC”), projected losses on mortgage loans originated, anticipated changes in our revenues or earnings, the effects of government regulation applicable to our operations, the appropriateness of our allowance for loan losses and provision for loan losses, the collectability of loans, our other plans, objectives, strategies, expectations and intentions 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,” “probable,” “projects,” “seeks,” “should,” “view,” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (i) risks associated with merger and acquisition integration, including the diversion of management time on acquisition-related issues and our ability to promptly and effectively integrate our businesses with those of SWS and achieve the synergies and value creation contemplated by the acquisition; (ii) our ability to estimate loan losses; (iii) changes in the default rate of our loans; (iv) risks associated with concentration in real estate related loans; (v) our ability to obtain reimbursements for losses on acquired loans under loss-share agreements with the FDIC; (vi) changes in general economic, market and business conditions in areas or markets where we compete; (vii) severe catastrophic events in Texas and other areas of the southern United States; (viii) changes in the interest rate environment; (ix) cost and availability of capital; (x) changes in state and federal laws, regulations or policies affecting one or more of the our business segments, including changes in regulatory fees, deposit insurance premiums, capital requirements and the Dodd-Frank Wall Street Reform and Consumer Protection Act; (xi) our ability to use net operating loss carry forwards to reduce future tax payments; (xii) approval of new, or changes in, accounting policies and practices; (xiii) changes in key management; (xiv) competition in our banking, broker-dealer, mortgage origination, and insurance segments from other banks and financial institutions, as well as investment banking and financial advisory firms, mortgage bankers, asset-based non-bank lenders, government agencies and insurance companies; (xv) failure of our insurance segment reinsurers to pay obligations under reinsurance contracts; and (xvi) our ability to use excess cash in an effective manner, including the execution of successful acquisitions. For further discussion of such factors, see the risk factors described in the Hilltop Annual Report on Form 10-K for the year ended December 31, 2014, Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015, and other reports filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.

 

Source: Hilltop Holdings Inc.

 

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