Hilltop Holdings Navigates Shifting Rates to Deliver Strong 2025, Eyes Strategic Growth in 2026

DALLAS, TX — January 30, 2026 — Hilltop Holdings Inc. (NYSE: HTH) capped off a robust 2025 with solid fourth-quarter results, demonstrating resilience in a complex macroeconomic environment. The Dallas-based financial services company, operating through its subsidiaries PlainsCapital Bank, PrimeLending, and Hilltop Securities, leveraged a favorable interest rate backdrop to significantly boost profitability, even as certain segments faced persistent industry pressures.

For the full year, net income attributable to common stockholders jumped 46% to $165.6 million, or $2.64 per diluted share. The company returned a total of $229 million to shareholders via dividends and share repurchases. The fourth quarter alone yielded net income of $41.6 million, or $0.69 per share.

"Our results reflect the strategic benefits of our diversified model," said CEO Jeremy Ford during the earnings call. "While the Federal Reserve's three rate cuts softened short-term rates, the steepening yield curve allowed our banking unit to expand net interest margin. Meanwhile, our securities business delivered consistently strong performance."

At the core of the year's success was PlainsCapital Bank, where proactive management of deposit costs helped increase the net interest margin (NIM) by 12 basis points year-over-year. The bank's NIM reached 3.29% in Q4. Hilltop Securities was another standout, posting an 18% pretax margin on net revenues of $138 million for the quarter, driven by strength in public finance, wealth management, and structured finance.

Not all segments shared in the upside. PrimeLending, the mortgage origination arm, reported a pretax loss of $5 million for Q4. The unit continues to grapple with the industry-wide trifecta of challenging affordability, low housing inventory, and elevated ownership costs. "We've executed operational cost reductions to optimize the platform," Ford noted, expressing cautious optimism for a gradual market recovery.

The quarter was not without blemishes. The company recorded $11.5 million in net charge-offs, $9.5 million of which were tied to two specific stressed auto loan credits previously discussed. CFO William Furr clarified that approximately $5.7 million had been reserved for these credits, mitigating the impact on the quarterly provision expense.

Looking ahead to 2026, management provided guidance anticipating continued loan growth of 4-6% at the bank, assuming the Federal Reserve delivers up to three additional rate cuts. The capital position remains solid, with a Common Equity Tier 1 ratio of 19.7%. The board authorized a new $125 million share repurchase program and increased the quarterly dividend by 11%.

Analyst and Investor Commentary:

"The numbers speak for themselves—a 46% jump in annual EPS is impressive in any rate environment," said David Chen, a portfolio manager at Lone Star Capital. "Hilltop's banking and securities groups are firing on all cylinders. The auto credit issues, while unfortunate, appear isolated and well-managed. Their capital return policy is a clear signal of confidence."

Rebecca Shaw, an independent banking analyst, offered a more measured take: "The beat is good, but the guide is cautious. The NII guidance seems to bake in margin compression, and the mortgage business remains a drag. Their success is heavily tied to the Texas economy staying hot and the Fed's cuts materializing as planned. It's a 'show me' story for 2026."

In a more critical view, Marcus Thorne, editor of the Hard Money Digest, commented sharply: "Another quarter, another multi-million dollar auto loan write-off they 'previously discussed.' When does proactive reserving become reactive firefighting? The core banking business is doing well, sure, but these repeated credit stumbles in a still-strong economy raise red flags about underwriting. And touting a dividend increase while buying back stock at elevated valuations feels more like financial engineering than prudent capital allocation."

The company's outlook hinges on its ability to sustain deposit cost management, navigate competitive loan pricing in Texas, and see a gradual thaw in the housing market. As the call concluded, the focus shifted to whether Hilltop's diversified model can continue to offset sector-specific weaknesses in the year ahead.