8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,  D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):    July 27, 2017

Hilltop Holdings Inc.

(Exact name of registrant as specified in its charter)

Maryland	1-31987	84-1477939
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

200 Crescent Court, Suite 1330
Dallas, Texas	75201
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (214) 855-2177

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 or Rule 12b– 2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 – Financial Information

Item 2.02  Results of Operations and Financial Condition.

On July 27, 2017,  Hilltop Holdings Inc., or the Company, issued a press release announcing its results of operations and financial condition as of and for the three months ended June 30, 2017. The text of the release is set forth in Exhibit 99.1 attached to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Current Report on Form 8-K (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth in such filing.

Section 8 – Other Events

Item 8.01  Other Events.

On July 27, 2017, the Board of Directors of the Company declared a quarterly cash dividend of $0.06 per common share, payable on August 31, 2017, to stockholders of record as of the close of business on August 15, 2017. 

Section 9 – Financial Statements and Exhibits

Item 9.01  Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

Not applicable.

(b) Pro forma financial information.

Not applicable.

(c) Shell company transactions.

Not applicable.

(d) Exhibits.

The following exhibit(s) are filed or furnished, depending on the relative item requiring such exhibit, in accordance with the provisions of Item 601 of Regulation S-K and Instruction B.2 to this form.

Exhibit Number	Description of Exhibit
99.1	Press Release dated July 27, 2017 (furnished pursuant to Item 2.02).

-2-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Hilltop Holdings Inc.,
		a Maryland corporation
Date:	July 27, 2017	By:	/s/ COREY PRESTIDGE
		Name:	Corey G. Prestidge
		Title:	Executive Vice President,
			General Counsel & Secretary

-3-

INDEX TO EXHIBITS

Exhibit Number	Description of Exhibit
99.1	Press Release dated July 27, 2017 (furnished pursuant to Item 2.02).

EX-99.1

Exhibit 99.1

Investor Relations Contact:

Isabell Novakov

214-252-4029

inovakov@hilltop-holdings.com

Hilltop Holdings Inc. Announces Financial Results for Second Quarter 2017

DALLAS — (BUSINESS WIRE) July 27, 2017 — Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2017. Hilltop produced income of $62.5 million, or $0.63 per diluted share, for the second quarter of 2017, compared to $31.1 million, or $0.32 per diluted share, for the second quarter of 2016.  Hilltop’s annualized return on average assets and return on average equity for the second quarter of 2017 were 1.94% and 13.24%, respectively, compared to 1.05% and 7.07%, respectively, for the second quarter of 2016.

Hilltop’s results during the three and six months ended June 30, 2017 included non-recurring items related to the Bank’s recording of 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 previously charged-off by the Bank during the second quarter of 2016 and the recognition within corporate of a pre-tax net increase to other noninterest income of $11.6 million (or $14.3 million after income tax benefit of $2.6 million) related to the resolution of the appraisal proceedings from the SWS Merger. The resolution of this matter resulted in 1,856,638 shares of HTH common stock, which had been held in escrow during the pendency of the proceeding, being returned to the Company’s pool of authorized but unissued shares of common stock.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.06 per common share, payable on August 31, 2017, to all common stockholders of record as of the close of business on August 15, 2017. Additionally, pursuant to the stock repurchase program reauthorized by the Hilltop Board of Directors in January 2017, Hilltop paid $8.8 million to repurchase 343,823 shares at an average price of $25.58 per share during the second quarter of 2017. These shares were returned to the pool of authorized but unissued shares of common stock. 

Jeremy Ford, Co-CEO of Hilltop, said, “The second quarter 2017 results continued to demonstrate the benefit of our diversified business model with seasonal strength in the mortgage origination segment, offset by expected seasonal storm activity in the insurance segment. Our strong balance sheet and earnings enabled us to return $14.6 million of capital to shareholders during the quarter.”

Alan White, Co-CEO of Hilltop, added, “We continue to focus on improving the long-term fundamental drivers of our businesses. PlainsCapital Bank maintained a stable net interest margin and sound credit quality. PrimeLending grew home purchase origination volumes compared to the second quarter of 2016. HilltopSecurities achieved a pre-tax margin of 15.3% and provided $1.3 billion of core deposits to PlainsCapital Bank. Despite an active spring storm season, National Lloyds reported a modest improvement in its loss and LAE ratio.”

Second Quarter 2017 Highlights for Hilltop:

· Hilltop’s total assets were $13.3 billion at June 30, 2017, compared to $12.3 billion at March 31, 2017;

· Hilltop’s common equity increased by $4.1 million from March 31, 2017 to $1.9 billion at June 30, 2017;

· Non-covered loans1 held for investment, net of allowance for loan losses, increased by  5.8% to $6.1 billion and covered loans1, net of allowance for loan losses, decreased by 12.3% to $205.9 million at June 30, 2017 from March 31, 2017;

· Non-covered non-performing loans increased to $29.5 million, or 0.36% of total non-covered loans, at June 30, 2017, compared to $28.8 million, or 0.41% of total non-covered loans, at March 31, 2017;

· Energy classified and criticized loans were $26.9 million at June 30, 2017,  slightly up from  $26.5 million at March 31, 2017;

· Loans held for sale increased by 50.5% to $2.0 billion from March 31, 2017 to June 30, 2017;

· Total deposits were $7.6 billion at June 30, 2017, compared to $7.3 billion at March 31, 2017;

· Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio2 of 13.07% and a Common Equity Tier 1 Capital Ratio of 17.53% at June 30, 2017;

· Hilltop’s net interest margin3 increased to 4.04%  for the  second quarter of 2017, from 3.52% in the first quarter of 2017;

· The provision for loan losses was $5.9 million during the second quarter of 2017, compared to $1.7 million in the first quarter of 2017;  

· For the second quarter of 2017, noninterest income was $344.7 million, compared to $346.0 million in the second quarter of 2016,  a 0.4%  decrease, and included significant non-recurring items related to the following: 

o During the second quarter of 2017, 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;

o During the second quarter of 2017, 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 2017, noninterest expense was $366.3 million, compared to $367.4 million in the second quarter of 2016, a 0.3%  decrease; and

· National Lloyds Corporation paid off its $20.0 million insurance company note payable due March 2035.

1   “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.”

2   Based on the end of period Tier 1 capital divided by total average assets during  2017, excluding goodwill and intangible assets.

3   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)	2017		2017		2016		2016		2016
Cash and due from banks	$	405,938	$	545,928	$	669,357	$	528,519	$	583,984
Federal funds sold		388		24,404		21,407		40,419		29,677
Securities purchased under agreements to resell		125,188		113,228		89,430		138,284		149,474
Assets segregated for regulatory purposes		167,565		166,395		180,993		173,840		120,214
Securities:
Trading, at fair value		471,485		373,300		265,534		402,104		305,418
Available for sale, at fair value		763,206		755,546		598,007		563,720		517,784
Held to maturity, at amortized cost		359,847		337,357		351,831		365,934		354,443
		1,594,538		1,466,203		1,215,372		1,331,758		1,177,645
Loans held for sale		2,000,257		1,329,493		1,795,463		1,673,069		1,550,475
Non-covered loans, net of unearned income		6,118,211		5,783,853		5,843,499		5,674,655		5,472,446
Allowance for non-covered loan losses		(59,208)		(55,157)		(54,186)		(52,625)		(51,013)
Non-covered loans, net		6,059,003		5,728,696		5,789,313		5,622,030		5,421,433
Covered loans, net of allowance for covered loan losses		205,877		234,681		255,714		292,031		322,073
Broker-dealer and clearing organization receivables		1,552,525		1,574,031		1,497,741		1,340,617		2,257,480
Premises and equipment, net		183,994		184,091		190,361		190,645		189,511
FDIC indemnification asset		40,304		47,940		71,313		73,351		74,460
Covered other real estate owned		42,304		45,374		51,642		61,988		67,634
Other assets		618,368		583,554		613,453		657,805		832,344
Goodwill		251,808		251,808		251,808		251,808		251,808
Other intangible assets, net		40,516		42,601		44,695		47,112		49,690
Total assets	$	13,288,573	$	12,338,427	$	12,738,062	$	12,423,276	$	13,077,902
Deposits:
Non-interest bearing	$	2,251,208	$	2,272,905	$	2,199,483	$	2,232,813	$	2,280,108
Interest bearing		5,323,414		5,056,957		4,864,328		4,797,772		4,846,705
Total deposits		7,574,622		7,329,862		7,063,811		7,030,585		7,126,813
Broker-dealer and clearing organization payables		1,395,314		1,437,548		1,347,128		1,251,839		2,111,994
Short-term borrowings		1,515,069		753,777		1,417,289		1,265,022		1,012,862
Securities sold, not yet purchased, at fair value		149,869		144,193		153,889		164,633		178,235
Notes payable		300,283		324,701		317,912		313,313		319,636
Junior subordinated debentures		67,012		67,012		67,012		67,012		67,012
Other liabilities		393,351		392,025		496,501		481,504		464,904
Total liabilities		11,395,520		10,449,118		10,863,542		10,573,908		11,281,456
Common stock		963		984		985		985		985
Additional paid-in capital		1,529,903		1,570,329		1,572,877		1,570,025		1,568,053
Accumulated other comprehensive income		2,112		897		485		8,039		8,782
Retained earnings		356,564		313,197		295,568		266,048		214,116
Deferred compensation employee stock trust, net		845		893		903		900		938
Employee stock trust		(248)		(300)		(309)		(309)		(347)
Total Hilltop stockholders' equity		1,890,139		1,886,000		1,870,509		1,845,688		1,792,527
Noncontrolling interests		2,914		3,309		4,011		3,680		3,919
Total stockholders' equity		1,893,053		1,889,309		1,874,520		1,849,368		1,796,446
Total liabilities & stockholders' equity	$	13,288,573	$	12,338,427	$	12,738,062	$	12,423,276	$	13,077,902

	Three Months Ended
Consolidated Income Statements	June 30,		March 31,		December 31,		September 30,		June 30,
(in 000's, except per share data)	2017		2017		2016		2016		2016
Interest income:
Loans, including fees	$	113,793	$	89,991	$	102,046	$	97,590	$	98,468
Securities borrowed		9,597		8,053		6,566		9,037		6,326
Securities:
Taxable		9,539		7,027		7,097		5,935		6,834
Tax-exempt		1,375		1,244		1,530		1,518		1,537
Other		2,002		1,926		1,096		1,183		1,037
Total interest income		136,306		108,241		118,335		115,263		114,202
Interest expense:
Deposits		5,464		4,690		3,971		3,996		4,037
Securities loaned		7,481		6,340		4,653		6,954		4,916
Short-term borrowings		3,648		1,418		1,829		1,497		1,392
Notes payable		2,826		2,814		2,856		2,793		2,618
Junior subordinated debentures		744		711		703		673		655
Other		167		168		199		180		187
Total interest expense		20,330		16,141		14,211		16,093		13,805
Net interest income		115,976		92,100		104,124		99,170		100,397
Provision for loan losses		5,853		1,705		4,347		3,990		28,876
Net interest income after provision for loan losses		110,123		90,395		99,777		95,180		71,521
Noninterest income:
Net realized gains (losses) on securities		14		—		—		—		(46)
Net gains from sale of loans and other mortgage production income		153,688		124,150		137,270		175,412		167,012
Mortgage loan origination fees		25,976		19,556		24,850		26,807		25,797
Securities commissions and fees		37,804		39,057		39,425		39,722		40,442
Investment and securities advisory fees and commissions		25,537		22,202		31,690		31,129		29,354
Net insurance premiums earned		36,020		36,140		38,344		38,747		38,721
Other		65,653		30,334		37,548		42,641		44,725
Total noninterest income		344,692		271,439		309,127		354,458		346,005
Noninterest expense:
Employees' compensation and benefits		214,413		186,559		208,760		225,194		217,398
Occupancy and equipment, net		27,919		27,293		27,154		27,460		26,971
Loss and loss adjustment expenses		33,184		21,700		14,018		16,055		37,211
Policy acquisition and other underwriting expenses		11,251		11,229		10,757		11,064		11,316
Other		79,484		73,711		95,095		84,360		74,469
Total noninterest expense		366,251		320,492		355,784		364,133		367,365
Income before income taxes		88,564		41,342		53,120		85,505		50,161
Income tax expense		25,754		15,035		17,582		33,017		18,439
Net income		62,810		26,307		35,538		52,488		31,722
Less: Net income (loss) attributable to noncontrolling interest		334		(127)		217		556		648
Income attributable to Hilltop	$	62,476	$	26,434	$	35,321	$	51,932	$	31,074
Earnings per common share:
Basic	$	0.64	$	0.27	$	0.36	$	0.53	$	0.32
Diluted	$	0.63	$	0.27	$	0.36	$	0.53	$	0.32
Cash dividends declared per common share	$	0.06	$	0.06	$	0.06	$	—	$	—
Weighted average shares outstanding:
Basic		98,154		98,441		98,514		98,490		98,457
Diluted		98,414		98,757		98,810		98,625		98,586

	Three Months Ended June 30, 2017
Segment Results					Mortgage						All Other and		Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	102,191	$	10,349	$	996	$	602	$	(2,288)	$	4,126	$	115,976
Provision for loan losses		5,405		448		—		—		—		—		5,853
Noninterest income		25,499		92,810		179,637		38,413		12,608		(4,275)		344,692
Noninterest expense		62,511		86,901		161,369		49,416		6,298		(244)		366,251
Income (loss) before income taxes	$	59,774	$	15,810	$	19,264	$	(10,401)	$	4,022	$	95	$	88,564

	Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
Selected Financial Data	2017		2017		2016		2016		2016
Hilltop Consolidated:
Return on average stockholders' equity		13.24%		5.73%		7.56%		11.41%		7.07%
Return on average assets		1.94%		0.88%		1.13%		1.69%		1.05%
Net interest margin (1)		4.04%		3.52%		3.80%		3.65%		3.77%
Net interest margin (taxable equivalent) (2):
As reported		4.05%		3.54%		3.82%		3.67%		3.80%
Impact of purchase accounting		82 bps		49 bps		71 bps		64 bps		72 bps
Book value per common share ($)		19.62		19.17		18.98		18.73		18.20
Shares outstanding, end of period (000's)		96,333		98,407		98,544		98,541		98,498
Dividend payout ratio (3)		9.43%		22.30%		16.71%		0.00%		0.00%
Banking Segment:
Net interest margin (1)		4.80%		4.21%		4.57%		4.50%		4.85%
Net interest margin (taxable equivalent) (2):
As reported		4.81%		4.23%		4.59%		4.53%		4.87%
Impact of purchase accounting		112 bps		67 bps		96 bps		90 bps		104 bps
Accretion of discount on loans ($000's)		23,164		12,098		17,926		15,969		17,344
Non-covered net charge-offs (recoveries) ($000's)		842		238		3,083		3,107		26,130
Return on average assets		1.63%		0.94%		1.09%		1.09%		0.66%
Fee income ratio		19.97%		13.13%		12.57%		12.31%		12.67%
Efficiency ratio		48.96%		64.36%		59.00%		59.59%		52.32%
Employees' compensation and benefits ($000's)		31,790		31,512		32,350		31,167		30,847
Broker-Dealer Segment:
Employees' compensation and benefits ($000's)		62,840		57,240		62,929		68,051		63,976
Variable compensation expense ($000's)		36,556		30,808		37,984		42,446		38,750
Compensation as a % of net revenue		60.9%		62.9%		58.6%		61.1%		58.0%
Pre-tax margin		15.33%		10.45%		-0.02%		15.65%		16.58%
Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		3,502,128		2,269,138		2,772,316		3,191,851		3,261,386
Refinancings		555,956		555,193		1,115,764		1,300,702		889,078
Total mortgage loan originations - volume		4,058,084		2,824,331		3,888,080		4,492,553		4,150,464
Mortgage loan sales - volume ($000's)		3,385,260		3,275,167		3,723,751		4,349,794		3,964,190
Mortgage servicing rights asset ($000's) (4)		43,580		45,573		61,968		43,751		33,491
Employees' compensation and benefits ($000's)		115,189		89,958		106,894		120,548		117,537
Variable compensation expense ($000's)		71,877		46,906		64,809		75,271		74,604
Insurance Segment:
Loss and LAE ratio		92.1%		60.0%		36.6%		41.4%		96.1%
Expense ratio		39.7%		38.4%		33.2%		33.6%		33.9%
Combined ratio		131.8%		98.4%		69.8%		75.0%		130.0%
Employees' compensation and benefits ($000's)		2,786		2,780		2,262		2,401		2,304

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

(2) 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 $0.5 million, $0.5 million, $0.6 million, $0.5 million, and $0.6 million, respectively, and for the Banking Segment were $0.4 million, $0.4 million, $0.4 million, $0.4 million, and $0.5 million, respectively.

(3) Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share.

(4) 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.

	June 30,		March 31,		December 31,		September 30,		June 30,
Capital Ratios	2017		2017		2016		2016		2016
Tier 1 capital (to average assets):
PlainsCapital		12.11%		13.09%		12.35%		12.65%		12.72%
Hilltop		13.07%		13.98%		13.51%		13.41%		13.18%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		13.95%		15.50%		14.64%		15.15%		14.71%
Hilltop		17.53%		19.03%		18.30%		17.80%		16.67%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		13.95%		15.50%		14.64%		15.15%		14.77%
Hilltop		18.07%		19.62%		18.87%		18.37%		17.26%
Total capital (to risk-weighted assets):
PlainsCapital		14.72%		16.30%		15.38%		15.90%		15.51%
Hilltop		18.57%		20.12%		19.34%		18.82%		17.69%

	June 30,		March 31,		December 31,		September 30,		June 30,
Non-Covered Non-Performing Loans Portfolio Data	2017		2017		2016		2016		2016
Non-covered loans accounted for on a non-accrual basis ($000's):
Commercial and industrial		13,818		13,490		9,515		19,651		18,412
Real estate		14,877		14,437		13,932		4,817		4,777
Construction and land development		632		661		755		703		139
Consumer		208		223		244		50		61
Broker-dealer		—		—		—		—		—
		29,535		28,811		24,446		25,221		23,389
Non-covered non-performing loans as a % of total non-covered loans		0.36%		0.41%		0.32%		0.34%		0.33%
Non-covered other real estate owned ($000's)		4,591		4,556		4,507		3,063		2,656
Other repossessed assets ($000's)		723		681		1,117		1,654		—
Non-covered non-performing assets ($000's)		34,849		34,048		30,070		29,938		26,045
Non-covered non-performing assets as a % of total assets		0.26%		0.28%		0.24%		0.24%		0.20%
Non-covered non-PCI loans past due 90 days or more and still accruing ($000's)		48,757		42,767		47,486		41,824		50,032
Troubled debt restructurings included in accruing non-covered loans ($000's)		1,170		1,180		1,196		1,216		1,235

	June 30,		March 31,		December 31,		September 30,		June 30,
PlainsCapital Bank - Energy Exposure	2017		2017		2016		2016		2016
Select Energy Statistics
Outstanding energy loan balance ($MM)		158.2		149.1		166.5		168.8		223.6
Energy unfunded commitments ($MM)		121.9		130.4		121.4		120.7		88.5
Energy loans as a % of total loans		2.7%		2.7%		3.0%		3.1%		4.2%
Classified and criticized energy loans ($MM):
Criticized energy loans		0.0		0.0		0.0		1.8		12.7
Performing classified energy loans		23.6		22.5		23.5		24.2		22.1
Non-performing classified energy loans		3.3		4.0		5.2		13.4		6.7
		26.9		26.5		28.7		39.4		41.5
Unimpaired energy reserves ($MM)		11.3		10.6		10.6		10.0		9.8
Energy reserves as a % of energy loans		7.1%		7.1%		6.5%		6.7%		4.7%
Energy NCOs ($MM)		0.0		0.0		1.5		1.0		0.4
Energy Portfolio Breakdown
Exploration and production		14%		13%		11%		13%		10%
Services:
Field services		22%		24%		22%		26%		22%
Pipeline construction		22%		22%		21%		21%		15%
		44%		46%		43%		47%		37%
Midstream:
Distribution		16%		18%		30%		21%		38%
Transportation		9%		10%		9%		11%		9%
		25%		28%		39%		32%		47%
Other:
Wholesalers		1%		1%		1%		1%		1%
Equipment rentals		0%		0%		0%		0%		0%
Equipment wholesalers		16%		12%		6%		7%		5%
Total		100%		100%		100%		100%		100%

	Three Months Ended June 30,
	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)	$	7,794,300	$	113,794	5.81	%	$	7,038,518	$	98,468	5.56	%
Investment securities - taxable		1,399,402		9,516	2.72	%		1,080,097		6,813	2.53	%
Investment securities - non-taxable (2)		232,340		1,903	3.28	%		291,288		2,166	2.98	%
Federal funds sold and securities purchased under agreements to resell		147,179		27	0.07	%		144,820		36	0.10	%
Interest-bearing deposits in other financial institutions		381,100		885	0.93	%		388,520		484	0.50	%
Securities borrowed		1,512,222		9,597	2.51	%		1,702,286		6,327	1.49	%
Other		81,230		1,113	5.49	%		58,081		537	3.72	%
Interest-earning assets, gross (2)		11,547,773		136,835	4.72	%		10,703,610		114,831	4.27	%
Allowance for loan losses		(57,976)						(51,247)
Interest-earning assets, net		11,489,797						10,652,363
Noninterest-earning assets		1,529,020						1,523,095
Total assets	$	13,018,817					$	12,175,458
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	5,140,116	$	5,464	0.43	%	$	4,821,695	$	4,037	0.34	%
Securities loaned		1,388,897		7,481	2.16	%		1,626,021		4,916	1.22	%
Notes payable and other borrowings		1,708,241		7,386	1.72	%		1,096,007		4,852	1.78	%
Total interest-bearing liabilities		8,237,254		20,331	0.99	%		7,543,723		13,805	0.73	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		2,273,533						2,203,065
Other liabilities		612,712						657,435
Total liabilities		11,123,499						10,404,223
Stockholders’ equity		1,893,052						1,768,717
Noncontrolling interest		2,266						2,518
Total liabilities and stockholders' equity	$	13,018,817					$	12,175,458
Net interest income (2)			$	116,504					$	101,026
Net interest spread (2)					3.73	%					3.53	%
Net interest margin (2)					4.05	%					3.80	%

(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 $0.5 million and $0.6  million for the  three months ended June 30, 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,  July 28, 2017. Hilltop Co-CEOs Jeremy B. Ford and Alan B. White and other key management members will review second 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 June 30, 2017, Hilltop employed approximately 5,500 people and operated approximately 465 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, 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 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,” “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.

Source: Hilltop Holdings Inc.