PrimeLending stays in the red, losses ease in Q4

Industry headwinds pushed Primelending, Hilltop Holding's mortgage subsidiary through Plainscapital Bank, into the red again in the fourth quarter, the company said.

Primelending produced a pretax loss of $5.2 million in the fourth quarter, lower than the loss of $7.2 million in the third quarter and the loss of $15.9 million in the same period a year earlier, according to the company's earnings report released Thursday. Primelending has failed to turn a profit in five of the last six quarters.

It lost $17.5 million in all of 2025, nearly half of 2024's loss of $33.7 million.

"The combination of further expense optimization and a tightening in the spread between the going on mortgage rates and the 10-year treasury note helped to shrink the operating losses for the year 2025," said Jeremy Ford, president and CEO, during the earnings call. 

Noninterest expenses fell by $700,000, or 0.9%, year over year in the fourth quarter, reflecting the company's efforts to resize the business to align with the current environment, according to Hilltop's earnings presentation. 

"We realized a seasonally healthy start to the winter months from an origination volume perspective as a decline in going on mortgage rates spurred on a modest rebound relative to the various subdued second and third quarters of this year," Ford said. However, profitability remains difficult as headwinds of challenging affordability, low new-home inventory and increased ownership expenses continued to weigh on industry volumes and margins, he added.

Despite this, origination volume and gain-on-sale margin both notably improved in the fourth quarter as well. Volume increased $134 million, or 5.8%, from the previous quarter and $177 million, or 7.9%, from the fourth quarter of 2024 to $2.4 billion. Purchase volumes were relatively stable at $1.9 billion, while refinance volumes increased by $168 million, or 49%, year over year.

Margins for the fourth quarter were 246 basis points, compared with 234 basis points three months prior and 221 basis points one year ago. Gain-on-sale of loans sold to third parties rose 19 basis points from the fourth quarter of 2024 to 250 as well.

For all of 2025, Primelending originated $8.9 billion, up from $8.6 billion in 2024.

"I think we expect total revenue between both gain on sale margin and mortgage origination fees really to be stable,"  said William Furr, executive vice president and chief financial officer, during the conference call. "But again, our view has been and continues to be, we're going to see a steady improvement in the overall mortgage market, not a hockey stick change."