Oct 23, 2026 earnings call — Bank loan growth and mortgage stress
Hilltop reported net income of $24.9 million and PlainsCapital Bank NIM rose to 3.49%.
Revenue $0.3B (est $0.3B) · EPS $0.44 (est $0.64)
Key quotes
"The dramatic increase in interest rates, specifically during the month of September, when 30-year average mortgage rates increased by nearly 70 basis points, put downward pressure on purchase activity across the market."
"At PlainsCapital Bank, strong growth across our markets in both core loans and deposits drove an increase in net interest income and a resulting increase in pre-provision net revenue on a quarter-over-quarter and year-over-year basis."
"Hilltop's allowance for credit losses increased during the quarter by $9 million to $94 million, resulting in a coverage ratio of ACL to loans HFI of 1.07%."
Analyst Q&A 3
mortgage outlook and net interest margin
Q (Hannah Wynn · KBW): She asked how to think about the mortgage business given weak pipelines and whether expenses will keep causing losses. She also asked how much runway exists for loan repricing and where NIM might trend.
A: Management said they are focused on productivity and will adjust the mortgage business expense base to the market while supporting loan officers. They expect net interest income to keep improving but said deposit costs have likely bottomed and NIM could level off or drift a bit lower from the 333 level.
"But overall, from a NIM perspective, we would expect to see NIM level out and potentially travel a little lower from these levels, from the 333 level." — Will Furr
loan growth drivers and buyback activity
Q (Matt Olney · Stephens): He asked what drove the strong loan growth and whether that momentum can continue. He also asked why buybacks slowed and if the company plans to use the remaining authorization before it expires.
A: Management said loan growth was driven by commercial loans, especially in Texas, with about 7% overall growth and roughly $300 million coming from CRE; pipelines and recruiting of bankers are strong and no outsized payoffs are expected in Q4. On buybacks, they said they repurchased $20 million this quarter versus $50 million in prior quarters because the stock was elevated and rates were rising; $85 million of authorization remains but they do not expect to use it all in one quarter and will transact when the window opens.
"As we noted, we've seen about 7% overall growth." — Will Furr
expense drivers and deposit growth outlook
Q (Evan Yee · Raymond James): He asked what drove the improvement in non-variable expense outlook and how to think about expenses next year. He also asked about deposit growth going into 2027.
A: Management said priorities are to grow productive sales resources across broker-dealer, mortgage, and bank while driving productivity through technology and process improvements; they have kept expenses stable excluding variable compensation. For deposits, they are focused on growing low-cost, core commercial deposits through treasury services and customer initiatives and see a positive trajectory into 2027, with guidance to be updated in January.
"We believe expenses will be a little lower." — Will Furr