23. Segment and Related Information

The Company currently has four reportable business segments that are organized primarily by the core products offered to the segments’ respective customers. These segments reflect the manner in which operations are managed and the criteria used by the Company’s chief operating decision maker function to evaluate segment performance, develop strategy and allocate resources. The chief operating decision maker function consists of the Company’s President and Co-Chief Executive Officer and the Company’s Vice Chairman and Co-Chief Executive Officer.

The banking segment includes the operations of the Bank, and since August 1, 2018, the operations of the former BORO acquired in the BORO Acquisition. The broker-dealer segment includes the operations of Securities Holdings, the mortgage origination segment is composed of PrimeLending, and the insurance segment is composed of NLC.

Corporate includes certain activities not allocated to specific business segments. These activities include holding company financing and investing activities, merchant banking investment opportunities and management and administrative services to support the overall operations of the Company including, but not limited to, certain executive management, corporate relations, legal, finance, acquisition costs and the activities related to the Hilltop Plaza investment.

Balance sheet amounts not discussed previously and the elimination of intercompany transactions are included in “All Other and Eliminations.” The following tables present certain information about reportable business segment revenues, operating results, goodwill and assets (in thousands).


					Mortgage						All Other and		Hilltop
Three Months Ended September 30, 2018	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	94,921	$	12,432	$	363	$	733	$	(3,275)	$	5,167	$	110,341
Recovery of loan losses		—		(371)		—		—		—		—		(371)
Noninterest income		11,365		82,834		144,400		36,724		523		(6,149)		269,697
Noninterest expense		67,714		85,713		140,006		33,807		8,656		(185)		335,711
Income (loss) before income taxes	$	38,572	$	9,924	$	4,757	$	3,650	$	(11,408)	$	(797)	$	44,698

					Mortgage						All Other and		Hilltop
Nine Months Ended September 30, 2018	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	269,517	$	37,873	$	2,009	$	2,313	$	(7,848)	$	14,745	$	318,609
Recovery of loan losses		(1,531)		(307)		—		—		—		—		(1,838)
Noninterest income		32,188		224,969		434,262		108,288		1,246		(16,679)		784,274
Noninterest expense		192,626		241,456		420,736		104,532		23,399		(319)		982,430
Income (loss) before income taxes	$	110,610	$	21,693	$	15,535	$	6,069	$	(30,001)	$	(1,615)	$	122,291


					Mortgage						All Other and		Hilltop
Three Months Ended September 30, 2017	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	89,322	$	12,215	$	94	$	864	$	(2,589)	$	5,074	$	104,980
Provision (recovery) for loan losses		1,665		(405)		—		—		—		—		1,260
Noninterest income		11,414		91,418		163,758		36,839		182		(5,134)		298,477
Noninterest expense		62,750		83,836		151,056		47,015		9,325		(140)		353,842
Income (loss) before income taxes	$	36,321	$	20,202	$	12,796	$	(9,312)	$	(11,732)	$	80	$	48,355


					Mortgage						All Other and		Hilltop
Nine Months Ended September 30, 2017	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
Net interest income (expense)	$	273,595	$	31,052	$	(791)	$	1,982	$	(7,413)	$	14,631	$	313,056
Provision (recovery) for loan losses		8,907		(89)		—		—		—		—		8,818
Noninterest income		49,323		266,779		487,033		113,562		12,792		(14,881)		914,608
Noninterest expense		186,075		252,395		444,263		133,444		25,010		(602)		1,040,585
Income (loss) before income taxes	$	127,936	$	45,525	$	41,979	$	(17,900)	$	(19,631)	$	352	$	178,261


					Mortgage						All Other and		Hilltop
	Banking		Broker-Dealer		Origination		Insurance		Corporate		Eliminations		Consolidated
September 30, 2018
Goodwill	$	247,368	$	7,008	$	13,071	$	23,988	$	—	$	—	$	291,435
Total assets	$	9,946,278	$	3,341,891	$	1,767,554	$	283,253	$	2,136,398	$	(3,710,838)	$	13,764,536

December 31, 2017
Goodwill	$	207,741	$	7,008	$	13,071	$	23,988	$	—	$	—	$	251,808
Total assets	$	9,558,718	$	3,394,911	$	1,937,327	$	291,639	$	2,106,978	$	(3,923,787)	$	13,365,786

The Company performs required annual impairment tests of its goodwill as of October 1st. The goodwill impairment tests require the Company to make judgments in determining what assumptions to use in the calculations. The process consists of estimating the fair value of each reporting unit based on valuation techniques, including a discounted cash flow model using revenue and profit forecasts and recent industry transaction and trading multiples of peers, and comparing those estimated fair values with the carrying values of the assets and liabilities of the reporting unit, which includes the allocated goodwill.

The broker-dealer, mortgage origination and insurance reporting units have experienced lower-than-forecasted operating results during the first nine months of 2018. These conditions will be considered during the respective annual impairment evaluations of goodwill as of October 1, 2018. If the estimated fair value is less than the carrying value, the Company would be required to recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit.