Financial holding company Hilltop Holdings (NYSE: HTH) missed Wall Street’s revenue expectations in Q3 2026, with sales falling 6.5% year on year to $309.5 million. Its non-GAAP profit of $0.44 per share was 31.5% below analysts’ consensus estimates.

Is now the time to buy HTH? Find out in our full research report (it’s free for active Edge members).

StockStory’s take

Hilltop Holdings reported third quarter results that missed Wall Street’s revenue and non-GAAP profit expectations, reflecting several operational challenges. Management attributed the shortfall primarily to the impact of higher and more volatile interest rates, which led to mark-to-market losses in its mortgage and trading businesses. CEO Jeremy Ford pointed to “a drastic intra-quarter increase in mortgage rates” as a key factor that pressured PrimeLending’s volumes and margins. Additionally, the firm faced higher credit loss provisions and a challenging environment for its broker-dealer segment.

Looking forward, Hilltop’s outlook is shaped by persistent uncertainty around interest rates and the broader economy, with management emphasizing continued cost discipline and selective investment in growth. CFO Will Furr noted the company is “focused on controlling what we can with a focus on producing quality outcomes,” while warning that elevated rates and affordability challenges will likely keep mortgage originations under pressure. Management expects loan growth at PlainsCapital Bank to remain a bright spot, but rising deposit costs and intense competition could constrain margin improvement.

Key insights from management’s remarks

Management outlined several segment-specific drivers that shaped the quarter, including challenges in mortgage and trading, offset by loan and deposit growth in banking.

• Mortgage segment under pressure: PrimeLending experienced a notable pre-tax loss as a sharp increase in mortgage rates reduced purchase activity and lowered the value of its existing pipeline, with hedging strategies proving less effective in a rapid rate environment.
• Trading volatility affects broker-dealer: HilltopSecurities’ results were weighed down by elevated volatility in long-duration bonds, which led to lower trading activity and mark-to-market losses, particularly in structured finance and fixed income services.
• Loan growth at PlainsCapital Bank: The bank segment saw continued growth in core loans and deposits, with net interest margin expanding year over year, driven by stable deposit costs and upward repricing of loans. Recruitment of new bankers and a strong Texas economy supported this trend.
• Rising provision for credit losses: The company increased its allowance for credit losses due to portfolio growth and risk rating adjustments, reflecting a cautious stance given current economic uncertainties, though management noted no signs of systemic risk.
• Expense management focus: Non-interest expenses fell versus the prior year, primarily due to lower variable compensation in weaker segments. Management reinforced its commitment to keeping non-variable costs stable and improving productivity across the organization.

Drivers of future performance

Management sees ongoing interest rate volatility and a weak mortgage environment as primary headwinds, while commercial loan growth and cost control are expected to support performance.

• Mortgage origination headwinds: Management expects elevated mortgage rates and affordability concerns—including high insurance and property taxes—to continue to suppress origination volumes and compress margins in the mortgage segment through at least 2027.
• Deposit cost and margin dynamics: PlainsCapital Bank anticipates upward pressure on deposit costs as market competition intensifies; while net interest income may grow with loan expansion, net interest margin could stabilize or modestly decline from current levels.
• Expense discipline and technology: The company is prioritizing cost control by leveraging technology and process improvements, aiming to keep non-variable expenses flat while selectively investing in sales force and productivity enhancements across its banking, mortgage, and broker-dealer subsidiaries.

Catalysts in upcoming quarters

In upcoming quarters, the StockStory team will watch (1) whether PlainsCapital Bank can sustain its loan and deposit growth amid a more competitive deposit environment, (2) how quickly PrimeLending can adjust its cost base and regain profitability as mortgage headwinds persist, and (3) whether HilltopSecurities can navigate volatile markets and stabilize trading revenues. Execution on technology-driven productivity initiatives will also be a key signpost.

Hilltop Holdings currently trades at $36.75, down from $37.28 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

Stocks that trumped tariffs

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.