PrimeLending, Hilltop Holdings' mortgage unit (through its PlainsCapital Bank subsidiary) reduced its pretax losses 72% year-over-year. But the parent company gave a warning for the entire organization (including Hilltop Securities) that its future performance in 2026 is likely to be affected by things outside of its control.
Hilltop cited challenging changes in the political environment,
For the first quarter, these were coupled with exposure to changes in its funding costs along with inflationary pressures driven by the Iran conflict. They are expected to have an adverse impact on Hilltop's operating results during the remainder of 2026, the earnings press release stated.
"PrimeLending further reduced its operating losses in the quarter by capitalizing on higher origination volumes and an expanded gain on sale margin," Jeremy Ford, chairman, president and CEO of Hilltop, said in the press release.
What management said about mortgage on its call
During the earnings call Ford added that the business remains subject to
The spring and summer months are the prime periods for mortgage businesses.
"However, persistent volatility in long-term interest rates creates greater uncertainty around second and third quarter production than in a typical year," he continued.
PrimeLending's management anticipates "overall volumes will be materially impacted by prevailing mortgage rates," Ford said. "We remain focused on achieving internal productivity metrics to best position the business for profitability in this prolonged mortgage cycle."
How Hilltop Holdings performed during the quarter
First quarter net income attributable to Hilltop Holdings was $37.8 million, compared with $41.6 million
"Amid a volatile quarter, Hilltop delivered strong operating results with all three lines of business reporting improved year-over-year financial results," Ford commented in the press release.
PrimeLending's first quarter results
The mortgage business reported a pretax loss of $2.4 million for the quarter, an improvement over the fourth quarter loss of $5.2 million and
Furthermore, PrimeLending reported net gains from sale of loans and other production income along with mortgage loan origination fees was $72.9 million, compared with $67.7 million for the same three months in the prior year, a 7.6% increase. It was also slightly higher than the $72.6 million reported for the fourth quarter.
Total production of $2.03 billion included $1.43 billion of purchase activity during the three months ended March 31. In the fourth quarter of last year, PrimeLending originated $2.43 billion, $1.92 billion of it being for purchases. For the first quarter a year ago, total volume of $1.74 billion included $1.53 of purchase mortgages.
Total gain-on-sale margin was 254 basis points for the first quarter, up from 246 basis points three months earlier and 224 basis points one year ago.
During the quarter, PrimeLending's mortgage servicing portfolio grew to $20 billion from $17.5 billion on Dec. 31, 2025.
For the full year, even with the late first quarter volatility — or in fact because of it, management maintained its prior volume outlook for the full year at between $9 billion and $10 billion.
