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):    January 25, 2018

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.)

2323 Victory Avenue, Suite 1400
Dallas, Texas	75219
(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 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 January 25, 2018,  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 and year ended December 31, 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 January 25, 2018, the Board of Directors of the Company declared a quarterly cash dividend of $0.07 per common share, payable on February 28, 2018, to stockholders of record as of the close of business on February 15, 2018. 

Additionally, on January 25, 2018, the Board of Directors of the Company authorized a new stock repurchase program through January 2019. Under the program, the Company is authorized to repurchase, in the aggregate, up to $50.0 million of its outstanding common stock in open-market purchases or through privately negotiated transactions as permitted under Rule 10b-18 promulgated under the Securities Exchange Act of 1934. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations, as determined by the Company’s management team. The purchases will be funded from available cash balances.

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 January 25, 2018 (furnished pursuant to Item 2.02).

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:	January 25, 2018	By:	/s/ COREY PRESTIDGE
		Name:	Corey G. Prestidge
		Title:	Executive Vice President,
			General Counsel & Secretary

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 Fourth Quarter and Full Year 2017

DALLAS — (BUSINESS WIRE) January 25, 2018 — Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the fourth quarter and full year of 2017. Hilltop produced income of $13.4 million, or $0.14 per diluted share, for the fourth quarter of 2017, compared to $35.3 million, or $0.36 per diluted share, for the fourth quarter of 2016.  Income to common stockholders for the full year 2017 was $132.5 million, or $1.36  per diluted share, compared to $145.9 million, or $1.48 per diluted share, for the full year 2016.

Hilltop’s results during the fourth quarter and full year of 2017 include the estimated impact of a non-recurring, non-cash charge1 of $28.4 million primarily attributable to the revaluation of deferred tax assets as a result of the enactment of the Tax Cuts and Jobs Act (“Tax Legislation”). Our results during the full year of 2017 were also impacted by losses from Hurricanes Harvey and Irma of $8.2 million, as well as increases to other noninterest income of $15.0 million from coverage provided by an insurance policy for forgery of a document delivered in connection with a single, large loan charged off by the Bank in 2016 and $11.6 million from the resolution of the appraisal proceedings from the SWS merger, both of which occurred during the second quarter of 2017. The results for the fourth quarter and full year of 2016 included a specific legal reserve of $16.0 million related to one matter involving Hilltop Securities. The results for the full year of 2016 also included a $24.5 million charge-off of the previously discussed loan by the Bank.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.07 per common share, a 16.7% increase from prior quarter, payable on February 28, 2018, to all common stockholders of record as of the close of business on February 15, 2018.  Furthermore, the Hilltop Board of Directors authorized a new stock repurchase program through January 2019, under which Hilltop may repurchase, in the aggregate, up to $50.0 million of its outstanding common stock.

Jeremy Ford, Co-CEO of Hilltop, said, “Hilltop’s fourth quarter earnings reflect solid performance across our businesses, particularly from our insurance segment. We remain focused on profitable growth, efficiency improvements and sound capital management. Importantly, in 2017 Hilltop returned $50.5 million of capital to shareholders through dividends and share repurchases.”

Alan White, Co-CEO of Hilltop, added, “Hilltop’s operating companies continued to thrive from a shared commitment to our clients and communities. During this quarter, PlainsCapital Bank was able to grow core deposits and commercial loans, PrimeLending was able to increase mortgage market share, and HilltopSecurities was able to build on its earnings and margin momentum.”

Fourth Quarter 2017 Highlights for Hilltop:

· Hilltop’s annualized return on average assets1 and return on average equity1 for the fourth quarter of 2017 were 0.41% and 2.78%, respectively, compared to 1.13% and 7.56%, respectively, for the fourth quarter of 2016; 

· Hilltop’s total assets were $13.4 billion at December 31, 2017, compared to $13.5 billion at September 30, 2017;

· Hilltop’s common equity increased by $5.9 million from September 30, 2017 to $1.9 billion at December 31, 2017;

· Non-covered loans2 held for investment, net of allowance for loan losses, increased by 2.0% to $6.2 billion and covered loans2, net of allowance for loan losses, decreased by 4.7% to $179.4 million at December 31, 2017 compared to September 30, 2017;

· Non-covered non-performing loans  increased to $40.5 million, or 0.51% of total non-covered loans, at December 31, 2017, compared to $40.1 million, or 0.50% of total non-covered loans, at September 30, 2017;

· Energy classified and criticized loans were $28.6 million at December 31, 2017,  increasing from  $24.4 million at September 30, 2017;

· Loans held for sale decreased by 11.6% from September 30, 2017 to $1.7 billion at December 31, 2017;

· Total deposits were $8.0 billion at December 31, 2017, compared to $7.7 billion at September 30, 2017;

· Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio3 of 12.94% and a Common Equity Tier 1 Capital Ratio of 17.69% at December 31, 2017;

· Hilltop’s net interest margin4of 3.63% for the fourth quarter of 2017, compared to 3.50% in the third quarter of 2017;

· The provision for loan losses was $5.5 million during the fourth quarter of 2017, compared to $1.3 million in the third quarter of 2017;  

· For the fourth quarter of 2017, noninterest income was $290.5 million, compared to $309.1 million in the fourth quarter of 2016,  a 6.0%  decrease; and 

· For the fourth quarter of 2017, noninterest expense was $328.7 million, compared to $355.8 million in the fourth quarter of 2016, a 7.6%  decrease.

1      The enactment of Tax Legislation during the noted periods resulted in an estimated non-cash, non-recurring charge of $28.4 million primarily attributable to the revaluation of deferred tax assets. Certain Tax Legislation amounts are considered reasonable estimates as of December 31, 2017 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   “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.”

3   Based on the end of period Tier 1 capital divided by total average assets during  2017, 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	December 31,		September 30,		June 30,		March 31,		December 31,
(in 000's)	2017		2017		2017		2016		2016
Cash and due from banks	$	486,977	$	354,569	$	405,938	$	545,928	$	669,357
Federal funds sold		405		400		388		24,404		21,407
Securities purchased under agreements to resell		186,537		134,654		125,188		113,228		89,430
Assets segregated for regulatory purposes		186,578		207,336		167,565		166,395		180,993
Securities:
Trading, at fair value		730,685		676,411		471,485		373,300		265,534
Available for sale, at fair value		765,560		765,542		763,206		755,546		598,007
Held to maturity, at amortized cost		355,849		368,031		359,847		337,357		351,831
		1,852,094		1,809,984		1,594,538		1,466,203		1,215,372
Loans held for sale		1,715,357		1,939,321		2,000,257		1,329,493		1,795,463
Non-covered loans, net of unearned income		6,273,669		6,148,813		6,118,211		5,783,853		5,843,499
Allowance for non-covered loan losses		(60,957)		(58,779)		(59,208)		(55,157)		(54,186)
Non-covered loans, net		6,212,712		6,090,034		6,059,003		5,728,696		5,789,313
Covered loans, net of allowance for covered loan losses		179,400		188,269		205,877		234,681		255,714
Broker-dealer and clearing organization receivables		1,464,378		1,672,123		1,552,525		1,574,031		1,497,741
Premises and equipment, net		177,577		176,281		183,994		184,091		190,361
FDIC indemnification asset		29,340		33,143		40,304		47,940		71,313
Covered other real estate owned		36,744		40,343		42,304		45,374		51,642
Other assets		556,683		596,095		618,368		583,554		613,453
Goodwill		251,808		251,808		251,808		251,808		251,808
Other intangible assets, net		36,432		38,440		40,516		42,601		44,695
Total assets	$	13,373,022	$	13,532,800	$	13,288,573	$	12,338,427	$	12,738,062
Deposits:
Non-interest bearing	$	2,411,849	$	2,279,633	$	2,251,208	$	2,272,905	$	2,199,483
Interest bearing		5,566,270		5,383,814		5,323,414		5,056,957		4,864,328
Total deposits		7,978,119		7,663,447		7,574,622		7,329,862		7,063,811
Broker-dealer and clearing organization payables		1,287,563		1,517,698		1,395,314		1,437,548		1,347,128
Short-term borrowings		1,206,424		1,477,201		1,515,069		753,777		1,417,289
Securities sold, not yet purchased, at fair value		232,821		173,509		149,869		144,193		153,889
Notes payable		216,045		300,196		300,283		324,701		317,912
Junior subordinated debentures		67,012		67,012		67,012		67,012		67,012
Other liabilities		470,231		424,381		393,351		392,025		496,501
Total liabilities		11,458,215		11,623,444		11,395,520		10,449,118		10,863,542
Common stock		960		959		963		984		985
Additional paid-in capital		1,526,369		1,525,169		1,529,903		1,570,329		1,572,877
Accumulated other comprehensive income (loss)		(394)		2,585		2,112		897		485
Retained earnings		384,545		376,873		356,564		313,197		295,568
Deferred compensation employee stock trust, net		848		840		845		893		903
Employee stock trust		(247)		(241)		(248)		(300)		(309)
Total Hilltop stockholders' equity		1,912,081		1,906,185		1,890,139		1,886,000		1,870,509
Noncontrolling interests		2,726		3,171		2,914		3,309		4,011
Total stockholders' equity		1,914,807		1,909,356		1,893,053		1,889,309		1,874,520
Total liabilities & stockholders' equity	$	13,373,022	$	13,532,800	$	13,288,573	$	12,338,427	$	12,738,062

	Three Months Ended						Year Ended
Consolidated Income Statements	December 31,		September 30,		December 31,		December 31,		December 31,
(in 000's, except per share data)	2017		2017		2016		2017		2016
Interest income:
Loans, including fees	$	105,658	$	102,546	$	102,046	$	411,988	$	389,637
Securities borrowed		11,994		11,404		6,566		41,048		29,518
Securities:
Taxable		11,910		11,157		7,097		39,633		26,233
Tax-exempt		1,717		1,471		1,530		5,807		6,222
Other		2,386		2,366		1,096		8,680		4,344
Total interest income		133,665		128,944		118,335		507,156		455,954
Interest expense:
Deposits		7,700		6,841		3,971		24,695		15,843
Securities loaned		9,581		8,935		4,653		32,337		22,510
Short-term borrowings		4,118		4,567		1,829		13,751		5,803
Notes payable		2,611		2,680		2,856		10,931		10,849
Junior subordinated debentures		787		774		703		3,016		2,676
Other		176		167		199		678		742
Total interest expense		24,973		23,964		14,211		85,408		58,423
Net interest income		108,692		104,980		104,124		421,748		397,531
Provision for loan losses		5,453		1,260		4,347		14,271		40,620
Net interest income after provision for loan losses		103,239		103,720		99,777		407,477		356,911
Noninterest income:
Net gains from sale of loans and other mortgage production income		122,132		138,498		137,270		538,468		606,991
Mortgage loan origination fees		23,156		25,256		24,850		93,944		96,267
Securities commissions and fees		40,868		38,735		39,425		156,464		157,906
Investment and securities advisory fees and commissions		36,561		25,620		31,690		109,920		115,992
Net insurance premiums earned		35,645		34,493		38,344		142,298		155,545
Other		32,094		35,875		37,548		163,970		154,264
Total noninterest income		290,456		298,477		309,127		1,205,064		1,286,965
Noninterest expense:
Employees' compensation and benefits		205,642		209,747		208,760		816,994		834,113
Occupancy and equipment, net		29,658		29,073		27,154		113,943		109,418
Professional services		24,220		25,560		42,983		101,521		128,176
Loss and loss adjustment expenses		8,583		31,234		14,018		94,701		89,243
Other		60,567		58,228		62,869		242,096		251,521
Total noninterest expense		328,670		353,842		355,784		1,369,255		1,412,471
Income before income taxes		65,025		48,355		53,120		243,286		231,405
Income tax expense		51,350		18,003		17,582		110,142		83,461
Net income		13,675		30,352		35,538		133,144		147,944
Less: Net income attributable to noncontrolling interest		247		146		217		600		2,050
Income attributable to Hilltop	$	13,428	$	30,206	$	35,321	$	132,544	$	145,894
Earnings per common share:
Basic	$	0.14	$	0.31	$	0.36	$	1.36	$	1.48
Diluted	$	0.14	$	0.31	$	0.36	$	1.36	$	1.48
Cash dividends declared per common share	$	0.06	$	0.06	$	0.06	$	0.24	$	0.06
Weighted average shares outstanding:
Basic		95,903		96,096		98,514		97,137		98,404
Diluted		96,080		96,306		98,810		97,353		98,629

	Three Months Ended December 31, 2017
Segment Results					Mortgage						All Other and		Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	92,986	$	12,684	$	(124)	$	880	$	(2,656)	$	4,922	$	108,692
Provision for loan losses		5,166		287		—		—		—		—		5,453
Noninterest income		10,580		101,642		145,355		37,820		5		(4,946)		290,456
Noninterest expense		62,328		94,917		137,636		24,910		8,974		(95)		328,670
Income (loss) before income taxes	$	36,072	$	19,122	$	7,595	$	13,790	$	(11,625)	$	71	$	65,025

	Year Ended December 31, 2017
					Mortgage						All Other and		Hilltop
(in 000's)	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	366,581	$	43,735	$	(915)	$	2,861	$	(10,069)	$	19,555	$	421,748
Provision for loan losses		14,073		198		—		—		—		—		14,271
Noninterest income		59,904		368,421		632,388		151,382		12,798		(19,829)		1,205,064
Noninterest expense		248,404		347,314		581,899		158,354		33,983		(699)		1,369,255
Income (loss) before income taxes	$	164,008	$	64,644	$	49,574	$	(4,111)	$	(31,254)	$	425	$	243,286

	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
Selected Financial Data	2017		2017		2016		2017		2016
Hilltop Consolidated:
Return on average stockholders' equity (1)		2.78%		6.32%		7.56%		7.00%		8.13%
Return on average assets (1)		0.41%		0.90%		1.13%		1.03%		1.21%
Net interest margin (2)		3.63%		3.50%		3.80%		3.67%		3.74%
Net interest margin (taxable equivalent) (3):
As reported		3.65%		3.52%		3.82%		3.69%		3.76%
Impact of purchase accounting		44 bps		37 bps		71 bps		53 bps		67 bps
Book value per common share ($)		19.92		19.88		18.98		19.92		17.63
Shares outstanding, end of period (000's)		95,982		95,904		98,544		95,982		98,544
Dividend payout ratio (4)		42.86%		19.09%		16.71%		17.59%		4.05%
Banking Segment:
Net interest margin (2)		4.23%		4.03%		4.57%		4.31%		4.65%
Net interest margin (taxable equivalent) (3):
As reported		4.24%		4.05%		4.59%		4.33%		4.68%
Impact of purchase accounting		60 bps		51 bps		96 bps		72 bps		93 bps
Accretion of discount on loans ($000's)		12,642		10,541		17,926		58,445		67,870
Non-covered net charge-offs (recoveries) ($000's)		4,635		908		3,083		4,635		32,970
Return on average assets (1)		-0.08%		0.94%		1.09%		0.85%		0.94%
Fee income ratio		10.22%		11.33%		12.57%		14.05%		12.65%
Efficiency ratio		60.18%		62.29%		59.00%		58.24%		58.87%
Employees' compensation and benefits ($000's)		31,159		30,810		32,350		125,271		123,489
Broker-Dealer Segment:
Net revenue (5)		114,326		103,633		107,331		412,156		416,938
Employees' compensation and benefits ($000's)		70,169		60,365		62,929		250,614		252,772
Variable compensation expense ($000's)		41,239		35,085		37,984		143,688		148,611
Compensation as a % of net revenue		61.4%		58.2%		58.6%		60.8%		60.6%
Pre-tax margin		16.73%		19.49%		-0.02%		15.68%		9.47%
Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		2,870,864		3,332,441		2,772,316		11,974,571		11,276,378
Refinancings		732,129		640,064		1,115,764		2,483,342		4,183,835
Total mortgage loan originations - volume		3,602,993		3,972,505		3,888,080		14,457,913		15,460,213
Mortgage loan sales - volume ($000's)		3,791,638		4,002,195		3,723,751		14,454,260		15,155,340
Mortgage servicing rights asset ($000's) (6)		54,714		47,766		61,968		54,714		61,968
Employees' compensation and benefits ($000's)		96,257		111,133		106,894		412,537		435,669
Variable compensation expense ($000's)		59,130		66,420		64,809		244,333		266,373
Insurance Segment:
Loss and LAE ratio		24.1%		90.6%		36.6%		66.6%		57.4%
Expense ratio		41.0%		40.4%		33.2%		39.9%		33.5%
Combined ratio		65.1%		131.0%		69.8%		106.5%		90.9%
Employees' compensation and benefits ($000's)		3,418		2,578		2,262		11,562		9,145

(1) Noted measures during the three months and year 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 December 31, 2017 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) 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 $0.6  million,  $0.6 million, $0.6 million, $2.2 million, and  $2.4 million, respectively, and for the Banking Segment were $0.4  million, $0.4 million, $0.4 million, $1.6 million, and $1.5 million, respectively.

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

(5) Net revenue is defined as the sum of total broker-dealer net interest income plus total broker-dealer noninterest income

(6) 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.

	December 31,		September 30,		June 30,		March 31,		December 31,
Capital Ratios	2017		2017		2017		2016		2016
Tier 1 capital (to average assets):
PlainsCapital		12.32%		12.18%		12.11%		13.09%		12.35%
Hilltop		12.94%		12.87%		13.07%		13.98%		13.51%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.46%		14.44%		13.95%		15.50%		14.64%
Hilltop		17.69%		17.66%		17.53%		19.03%		18.30%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.46%		14.44%		13.95%		15.50%		14.64%
Hilltop		18.23%		18.20%		18.07%		19.62%		18.87%
Total capital (to risk-weighted assets):
PlainsCapital		15.28%		15.23%		14.72%		16.30%		15.38%
Hilltop		18.77%		18.71%		18.57%		20.12%		19.34%

	December 31,		September 30,		June 30,		March 31,		December 31,
Non-Covered Non-Performing Loans Portfolio Data	2017		2017		2017		2016		2016
Non-covered loans accounted for on a non-accrual basis ($000's):
Commercial and industrial		20,878		21,434		13,818		13,490		9,515
Real estate		18,978		17,996		14,877		14,437		13,932
Construction and land development		611		626		632		661		755
Consumer		56		63		208		223		244
Broker-dealer		—		—		—		—		—
		40,523		40,119		29,535		28,811		24,446
Non-covered non-performing loans as a % of total non-covered loans		0.51%		0.50%		0.36%		0.41%		0.32%
Non-covered other real estate owned ($000's)		3,883		4,827		4,591		4,556		4,507
Other repossessed assets ($000's)		323		437		723		681		1,117
Non-covered non-performing assets ($000's)		44,729		45,383		34,849		34,048		30,070
Non-covered non-performing assets as a % of total assets		0.33%		0.34%		0.26%		0.28%		0.24%
Non-covered non-PCI loans past due 90 days or more and still accruing ($000's)		61,082		45,134		48,757		42,767		47,486
Troubled debt restructurings included in accruing non-covered loans ($000's)		1,150		1,163		1,170		1,180		1,196

	December 31,		September 30,		June 30,		March 31,		December 31,
PlainsCapital Bank - Energy Exposure	2017		2017		2017		2016		2016
Select Energy Statistics
Outstanding energy loan balance ($MM)		151.3		151.3		158.2		149.1		166.5
Energy unfunded commitments ($MM)		126.2		137.9		121.9		130.4		121.4
Energy loans as a % of total loans		2.6%		2.6%		2.7%		2.7%		3.0%
Classified and criticized energy loans ($MM):
Criticized energy loans		0.0		0.0		0.0		0.0		0.0
Performing classified energy loans		16.1		11.6		23.6		22.5		23.5
Non-performing classified energy loans		12.5		12.8		3.3		4.0		5.2
		28.6		24.4		26.9		26.5		28.7
Unimpaired energy reserves ($MM)		12.0		12.0		11.3		10.6		10.6
Energy reserves as a % of energy loans		7.9%		7.9%		7.1%		7.1%		6.5%
Energy NCOs ($MM)		0.0		0.0		0.0		0.0		1.5
Energy Portfolio Breakdown
Exploration and production		13%		14%		14%		13%		11%
Services:
Field services		22%		23%		22%		24%		22%
Pipeline construction		26%		22%		22%		22%		21%
		48%		45%		44%		46%		43%
Midstream:
Distribution		16%		16%		16%		18%		30%
Transportation		8%		9%		9%		10%		9%
		24%		25%		25%		28%		39%
Other:
Wholesalers		<1%		1%		1%		1%		1%
Equipment rentals		0%		0%		0%		0%		0%
Equipment wholesalers		15%		15%		16%		12%		6%
Total		100%		100%		100%		100%		100%

	Three Months Ended December 31,
	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)	$	7,895,956	$	105,658	5.28	%	$	7,588,895	$	102,046	5.32	%
Investment securities - taxable		1,564,445		11,885	3.02	%		1,031,667		7,076	2.74	%
Investment securities - non-taxable (2)		257,779		2,323	3.59	%		282,027		2,139	3.03	%
Federal funds sold and securities purchased under agreements to resell		156,691		—	0.00	%		145,354		40	0.11	%
Interest-bearing deposits in other financial institutions		388,930		1,186	1.21	%		411,538		500	0.48	%
Securities borrowed		1,524,086		11,994	3.08	%		1,371,633		6,566	1.87	%
Other		80,787		1,225	6.04	%		74,583		576	3.06	%
Interest-earning assets, gross (2)		11,868,674		134,271	4.47	%		10,905,697		118,943	4.31	%
Allowance for loan losses		(61,674)						(54,089)
Interest-earning assets, net		11,807,000						10,851,608
Noninterest-earning assets		1,518,435						1,646,800
Total assets	$	13,325,435					$	12,498,408
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	5,446,430	$	7,700	0.56	%	$	4,839,376	$	3,971	0.33	%
Securities loaned		1,365,153		9,581	2.78	%		1,260,159		4,653	1.47	%
Notes payable and other borrowings		1,516,749		7,692	2.00	%		1,507,513		5,587	1.47	%
Total interest-bearing liabilities		8,328,332		24,973	1.19	%		7,607,048		14,211	0.74	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		2,438,605						2,356,373
Other liabilities		641,302						674,297
Total liabilities		11,408,239						10,637,718
Stockholders’ equity		1,915,184						1,857,830
Noncontrolling interest		2,012						2,860
Total liabilities and stockholders' equity	$	13,325,435					$	12,498,408
Net interest income (2)			$	109,298					$	104,732
Net interest spread (2)					3.28	%					3.57	%
Net interest margin (2)					3.65	%					3.82	%

	Year Ended December 31,
	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)	$	7,718,933	$	411,988	5.34	%	$	7,153,769	$	389,637	5.45	%
Investment securities - taxable		1,399,379		39,539	2.83	%		1,038,838		26,152	2.52	%
Investment securities - non-taxable (2)		234,741		8,012	3.41	%		282,780		8,674	3.07	%
Federal funds sold and securities purchased under agreements to resell		140,337		50	0.04	%		150,337		155	0.10	%
Interest-bearing deposits in other financial institutions		387,258		3,826	0.99	%		426,150		2,024	0.47	%
Securities borrowed		1,518,041		41,048	2.70	%		1,523,195		29,518	1.94	%
Other		85,125		4,897	5.75	%		66,088		2,247	3.40	%
Interest-earning assets, gross (2)		11,483,814		509,360	4.44	%		10,641,157		458,407	4.31	%
Allowance for loan losses		(59,153)						(51,925)
Interest-earning assets, net		11,424,661						10,589,232
Noninterest-earning assets		1,531,311						1,606,572
Total assets	$	12,955,972					$	12,195,804
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	5,220,359	$	24,695	0.47	%	$	4,824,374	$	15,843	0.33	%
Securities loaned		1,378,748		32,337	2.35	%		1,428,829		22,510	1.58	%
Notes payable and other borrowings		1,516,015		28,376	1.87	%		1,237,609		20,070	1.62	%
Total interest-bearing liabilities		8,115,122		53,071	1.05	%		7,490,812		58,423	0.78	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		2,309,776						2,241,561
Other liabilities		634,630						665,878
Total liabilities		11,059,528						10,398,251
Stockholders’ equity		1,894,009						1,795,219
Noncontrolling interest		2,435						2,334
Total liabilities and stockholders' equity	$	12,955,972					$	12,195,804
Net interest income (2)			$	456,289					$	399,984
Net interest spread (2)					3.38	%					3.53	%
Net interest margin (2)					3.69	%					3.76	%

(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 $0.6 million and $0.6 million for the three months ended December 31, 2017 and 2016, respectively, and $2.2 million and $2.4 million for the year ended December 31, 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,  January 26, 2018. Hilltop Co-CEOs Jeremy B. Ford and Alan B. White and other key management members will review fourth 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 December 31, 2017, Hilltop employed approximately 5,500 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 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.