Hilltop Holdings Inc. Announces Financial Results for Second Quarter 2023

By: Hilltop Holdings Inc. via Business Wire

July 20, 2023 at 16:45 PM EDT

Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2023. Hilltop produced income to common stockholders of $18.1 million, or $0.28 per diluted share, for the second quarter of 2023, compared to $33.3 million, or $0.45 per diluted share, for the second quarter of 2022. Hilltop’s financial results for the second quarter of 2023 included significant decreases in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income, an increase in the provision for credit losses from a build in the allowance within the banking segment, and increases in net revenues within certain of the broker-dealer segment’s business lines.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.16 per common share, payable on August 25, 2023, to all common stockholders of record as of the close of business on August 11, 2023.

Headwinds that began in 2022, and continued through the first half of 2023, including the impact of tight housing inventories on mortgage volumes, declining deposit balances, rapid increases in market interest rates and a declining economic forecast have had, and are expected to continue to have, an adverse impact on our operating results during the remainder of 2023. The impacts of such headwinds during the remainder of 2023 remain uncertain and will depend on developments outside of our control, including, among others, the timing and significance of further changes in U.S. treasury yields and mortgage interest rates, exposure to increasing funding costs, inflationary pressures associated with compensation, occupancy and software costs and labor market conditions, the Russian-Ukraine conflict and its impact on supply chains, and disruptions to the economy and the U.S. banking system caused by recent bank failures.

Jeremy B. Ford, President and CEO of Hilltop, said, “Hilltop’s operating results during the second quarter of 2023 reflected the challenging environment which included rising funding costs, an inverted yield curve and economic uncertainties. PlainsCapital Bank recognized an increase in its provision expense due to a combination of factors including deterioration in the economic outlook, negative credit migration and loan growth, as well as a decline in its net interest margin. At PrimeLending, we saw a modest rebound in the gain-on-sale margin, though the business continues to face challenges from a lack of housing inventory and affordability across the country. HilltopSecurities benefited from higher interest rates this quarter that drove a pre-tax margin of 16% on a 13% year-over-year increase in net revenues.

“As we enter the second half of 2023, we remain focused on maintaining our strong capital and liquidity positions, controlling expenses, and continuing to serve our valued clients.”

Second Quarter 2023 Highlights for Hilltop:

The provision for credit losses was $14.8 million during the second quarter of 2023, compared to a provision for credit losses of $2.3 million in the first quarter of 2023 and a provision for credit losses of $5.3 million in the second quarter of 2022;
- The provision for credit losses during the second quarter of 2023 reflected a significant build in the allowance related to loan portfolio changes since the prior quarter and a deteriorating outlook for commercial real estate markets.
For the second quarter of 2023, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $90.0 million, compared to $139.9 million in the second quarter of 2022, a 35.7% decrease;
- Mortgage loan origination production volume was $2.5 billion during the second quarter of 2023, compared to $3.8 billion in the second quarter of 2022;
- Net gains from mortgage loans sold to third parties increased to 207 basis points during the second quarter of 2023, compared to 193 basis points in the first quarter of 2023.
Hilltop’s consolidated annualized return on average assets and return on average stockholders’ equity for the second quarter of 2023 were 0.47% and 3.53%, respectively, compared to 0.80% and 5.82%, respectively, for the second quarter of 2022;
Hilltop’s book value per common share increased to $31.71 at June 30, 2023, compared to $31.63 at March 31, 2023;
Hilltop’s total assets were $17.1 billion and $17.0 billion at June 30, 2023 and March 31, 2023, respectively;
Loans¹, net of allowance for credit losses, were $7.9 billion and $7.7 billion at June 30, 2023 and March 31, 2023, respectively;
Non-performing loans were $39.0 million, or 0.40% of total loans, at June 30, 2023, compared to $27.4 million, or 0.30% of total loans, at March 31, 2023;
Loans held for sale increased by 28.2% from March 31, 2023 to $1.3 billion at June 30, 2023;
Total deposits were $11.2 billion and $11.1 billion at June 30, 2023 and March 31, 2023, respectively;
- Total estimated uninsured deposits were $4.4 billion, or approximately 40% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $350.7 million, were $4.1 billion, or approximately 37% of total deposits at June 30, 2023.
Hilltop maintained strong capital levels² with a Tier 1 Leverage Ratio³ of 11.47% and a Common Equity Tier 1 Capital Ratio of 17.63% at June 30, 2023;
Hilltop’s consolidated net interest margin⁴decreased to 3.03% for the second quarter of 2023, compared to 3.28% in the first quarter of 2023;
For the second quarter of 2023, noninterest income was $190.7 million, compared to $239.3 million in the second quarter of 2022, a 20.3% decrease;
For the second quarter 2023, noninterest expense was $267.0 million, compared to $298.5 million in the second quarter of 2022, a 10.6% decrease; and
Hilltop’s effective tax rate was 26.4% during the second quarter of 2023, compared to 25.6% during the same period in 2022.
- The effective tax rate for the second quarter of 2023 was higher than the applicable statutory rate primarily due to the booking of additional taxes from a recent change in the source of funding for an acquired non-qualified, deferred compensation plan.

______________________________
¹	“Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $358.5 million and $360.6 million at June 30, 2023 and March 31, 2023, respectively.
²	Capital ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period.
³	Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets.
⁴	Net interest margin is defined as net interest income divided by average interest-earning assets.

Consolidated Financial and Other Information

Consolidated Balance Sheets	June 30,			March 31,			December 31,			September 30,			June 30,
(in 000's)	2023			2023			2022			2022			2022
Cash and due from banks	$	1,584,709		$	1,764,081		$	1,579,512		$	1,777,584		$	1,783,554
Federal funds sold		650			743			650			663			381
Assets segregated for regulatory purposes		50,711			36,199			67,737			109,358			120,816
Securities purchased under agreements to resell		143,982			144,201			118,070			145,365			139,929
Securities:
Trading, at fair value		696,649			692,908			755,032			641,864			593,273
Available for sale, at fair value, net ⁽¹⁾		1,526,869			1,641,571			1,658,766			1,584,724			1,562,222
Held to maturity, at amortized cost, net ⁽¹⁾		847,437			862,280			875,532			889,452			920,583
Equity, at fair value		258			231			200			209			197
		3,071,213			3,196,990			3,289,530			3,116,249			3,076,275
Loans held for sale		1,333,044			1,040,138			982,616			1,003,605			1,491,579
Loans held for investment, net of unearned income		8,354,122			8,192,846			8,092,673			7,944,246			7,930,619
Allowance for credit losses		(109,306	)		(97,354	)		(95,442	)		(91,783	)		(95,298	)
Loans held for investment, net		8,244,816			8,095,492			7,997,231			7,852,463			7,835,321

Broker-dealer and clearing organization receivables		1,474,177			1,560,246			1,038,055			1,255,052			1,049,830
Premises and equipment, net		176,574			180,132			184,950			191,423			195,361
Operating lease right-of-use assets		97,979			100,122			102,443			103,099			106,806
Mortgage servicing assets		95,101			103,314			100,825			156,539			121,688
Other assets		588,166			529,438			518,899			624,235			513,570
Goodwill		267,447			267,447			267,447			267,447			267,447
Other intangible assets, net		9,772			10,544			11,317			12,209			13,182
Total assets	$	17,138,341		$	17,029,087		$	16,259,282		$	16,615,291		$	16,715,739

Deposits:
Noninterest-bearing	$	3,451,438		$	3,807,878		$	3,968,862		$	4,546,816		$	4,601,643
Interest-bearing		7,712,739			7,289,269			7,346,887			6,805,198			7,319,143
Total deposits		11,164,177			11,097,147			11,315,749			11,352,014			11,920,786
Broker-dealer and clearing organization payables		1,306,646			1,383,317			966,470			1,176,156			934,818
Short-term borrowings		1,628,637			1,572,794			970,056			942,309			822,649
Securities sold, not yet purchased, at fair value		74,761			51,497			53,023			99,515			135,968
Notes payable		364,531			376,410			346,654			390,354			389,722
Operating lease liabilities		119,999			122,878			126,759			120,635			124,406
Other liabilities		389,336			341,246			417,042			475,425			329,987
Total liabilities		15,048,087			14,945,289			14,195,753			14,556,408			14,658,336

Common stock		651			650			647			646			646
Additional paid-in capital		1,050,191			1,044,774			1,046,331			1,043,605			1,039,261
Accumulated other comprehensive loss		(131,718	)		(125,461	)		(133,531	)		(119,864	)		(95,279	)
Retained earnings		1,144,624			1,136,901			1,123,636			1,107,586			1,085,208
Deferred compensation employee stock trust, net		450			446			481			479			695
Employee stock trust		(599	)		(599	)		(640	)		(641	)		(954	)
Total Hilltop stockholders' equity		2,063,599			2,056,711			2,036,924			2,031,811			2,029,577
Noncontrolling interests		26,655			27,087			26,605			27,072			27,826
Total stockholders' equity		2,090,254			2,083,798			2,063,529			2,058,883			2,057,403
Total liabilities & stockholders' equity	$	17,138,341		$	17,029,087		$	16,259,282		$	16,615,291		$	16,715,739

______________________________
(1)	At June 30, 2023, the amortized cost of the available for sale securities portfolio was $1,658,036, while the fair value of the held to maturity securities portfolio was $755,186.

	Three Months Ended
Consolidated Income Statements	June 30,		March 31,		December 31,		September 30,			June 30,
(in 000's, except per share data)	2023		2023		2022		2022			2022
Interest income:
Loans, including fees	$	138,397	$	123,379	$	117,906	$	109,165		$	98,728
Securities borrowed		18,515		17,068		14,162		10,938			10,498
Securities:
Taxable		26,719		25,602		23,293		19,642			17,288
Tax-exempt		2,566		3,188		3,002		2,451			2,141
Other		27,229		22,190		21,611		14,276			6,478
Total interest income		213,426		191,427		179,974		156,472			135,133

Interest expense:
Deposits		54,726		35,824		28,238		12,525			5,456
Securities loaned		16,413		15,346		13,179		9,407			8,512
Short-term borrowings		17,706		12,444		10,278		5,550			3,020
Notes payable		3,973		3,853		3,988		3,907			3,809
Other		2,342		2,255		849		1,597			2,280
Total interest expense		95,160		69,722		56,532		32,986			23,077

Net interest income		118,266		121,705		123,442		123,486			112,056
Provision for (reversal of) credit losses		14,836		2,331		3,638		(780	)		5,336
Net interest income after provision for (reversal of) credit losses		103,430		119,374		119,804		124,266			106,720

Noninterest income:
Net gains from sale of loans and other mortgage production income		48,535		39,966		35,949		57,998			97,543
Mortgage loan origination fees		41,440		28,777		35,198		39,960			42,378
Securities commissions and fees		29,606		31,223		33,143		34,076			34,757
Investment and securities advisory fees and commissions		32,037		26,848		30,661		35,031			32,002
Other		39,034		35,680		34,833		39,910			32,593
Total noninterest income		190,652		162,494		169,784		206,975			239,273

Noninterest expense:
Employees' compensation and benefits		176,908		167,817		167,892		200,450			205,327
Occupancy and equipment, net		23,025		22,865		23,077		25,041			24,231
Professional services		12,594		10,697		11,555		10,631			16,246
Other		54,450		49,091		50,844		52,616			52,739
Total noninterest expense		266,977		250,470		253,368		288,738			298,543

Income before income taxes		27,105		31,398		36,220		42,503			47,450
Income tax expense		7,167		3,630		9,642		9,249			12,127
Net income		19,938		27,768		26,578		33,254			35,323
Less: Net income attributable to noncontrolling interest		1,805		1,968		1,022		1,186			2,063
Income attributable to Hilltop	$	18,133	$	25,800	$	25,556	$	32,068		$	33,260

Earnings per common share:
Basic	$	0.28	$	0.40	$	0.40	$	0.50		$	0.45
Diluted	$	0.28	$	0.40	$	0.39	$	0.50		$	0.45

Cash dividends declared per common share	$	0.16	$	0.16	$	0.15	$	0.15		$	0.15

Weighted average shares outstanding:
Basic		65,025		64,901		64,602		64,552			73,693
Diluted		65,054		64,954		64,779		64,669			73,838

	Three Months Ended June 30, 2023
Segment Results						Mortgage						All Other and			Hilltop
(in 000's)	Banking		Broker-Dealer			Origination			Corporate			Eliminations			Consolidated
Net interest income (expense)	$	100,986	$	13,201		$	(5,901	)	$	(3,479	)	$	13,459		$	118,266
Provision for (reversal of) credit losses		14,900		(64	)		—			—			—			14,836
Noninterest income		11,189		100,040			90,079			3,081			(13,737	)		190,652
Noninterest expense		57,436		94,853			98,660			16,301			(273	)		266,977
Income (loss) before taxes	$	39,839	$	18,452		$	(14,482	)	$	(16,699	)	$	(5	)	$	27,105

	Six Months Ended June 30, 2023
Segment Results					Mortgage						All Other and			Hilltop
(in 000's)	Banking		Broker-Dealer		Origination			Corporate			Eliminations			Consolidated
Net interest income (expense)	$	205,756	$	27,064	$	(10,109	)	$	(6,801	)	$	24,061		$	239,971
Provision for (reversal of) credit losses		16,500		667		—			—			—			17,167
Noninterest income		22,379		190,675		158,909			5,786			(24,603	)		353,146
Noninterest expense		113,563		185,198		187,413			31,814			(541	)		517,447
Income (loss) before taxes	$	98,072	$	31,874	$	(38,613	)	$	(32,829	)	$	(1	)	$	58,503

	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Selected Financial Data	2023			2023			2022			2022			2022

Hilltop Consolidated:
Return on average stockholders' equity		3.53	%		5.12	%		4.99	%		6.26	%		5.82	%
Return on average assets		0.47	%		0.69	%		0.63	%		0.79	%		0.80	%
Net interest margin ⁽¹⁾		3.03	%		3.28	%		3.23	%		3.19	%		2.75	%
Net interest margin (taxable equivalent) ⁽²⁾:
As reported		3.03	%		3.28	%		3.24	%		3.20	%		2.76	%
Impact of purchase accounting		9 bps			6 bps			7 bps			8 bps			8 bps
Book value per common share ($)		31.71			31.63			31.49			31.46			31.43
Shares outstanding, end of period (000's)		65,071			65,023			64,685			64,591			64,576
Dividend payout ratio ⁽³⁾		57.37	%		40.25	%		37.92	%		30.19	%		33.33	%

Banking Segment:
Net interest margin ⁽¹⁾		3.11	%		3.40	%		3.42	%		3.42	%		2.97	%
Net interest margin (taxable equivalent)⁽²⁾:
As reported		3.11	%		3.41	%		3.43	%		3.43	%		2.98	%
Impact of purchase accounting		11 bps			7 bps			8 bps			10 bps			10 bps
Accretion of discount on loans ($000's)		3,334			1,870			2,173			2,858			3,011
Net recoveries (charge-offs) ($000's)		(2,884	)		(419	)		21			(2,735	)		(1,223	)
Return on average assets		0.89	%		1.44	%		1.31	%		1.41	%		1.09	%
Fee income ratio		10.0	%		9.6	%		9.8	%		9.9	%		11.0	%
Efficiency ratio		51.2	%		48.4	%		48.9	%		48.9	%		50.4	%
Employees' compensation and benefits ($000's)		30,603			32,681			34,526			35,934			33,554

Broker-Dealer Segment:
Net revenue ($000's) ⁽⁴⁾		113,241			104,498			106,919			114,184			100,229
Employees' compensation and benefits ($000's)		65,290			62,429			60,552			70,274			64,494
Variable compensation expense ($000's)		34,798			30,821			32,042			42,567			37,471
Compensation as a % of net revenue		57.7	%		59.7	%		56.6	%		61.5	%		64.3	%
Pre-tax margin ⁽⁵⁾		16.3	%		12.8	%		18.5	%		15.3	%		9.1	%

Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		2,301,007			1,607,330			1,895,731			2,832,136			3,342,103
Refinancings		150,643			125,423			147,511			211,075			467,117
Total mortgage loan originations - volume		2,451,650			1,732,753			2,043,242			3,043,211			3,809,220
Mortgage loan sales - volume ($000's)		2,115,706			1,661,521			2,038,990			3,419,950			3,872,935
Net gains from mortgage loan sales (basis points):
Loans sold to third parties		207			193			211			227			260
Impact of loans retained by banking segment		(6	)		(7	)		(19	)		(9	)		(7	)
As reported		201			186			192			218			253
Mortgage servicing rights asset ($000's) ⁽⁶⁾		95,101			103,314			100,825			156,539			121,688
Employees' compensation and benefits ($000's)		70,982			62,355			64,940			86,079			100,206
Variable compensation expense ($000's)		36,249			25,573			26,724			44,312			56,525

______________________________
(1)	Net interest margin is defined as net interest income divided by average interest-earning assets.
(2)	Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.1 million, $0.1 million, $0.3 million, $0.4 million and $0.4 million, respectively, for the periods presented and for the banking segment were $0.2 million for each of the periods presented.
(3)	Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share.
(4)	Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income.
(5)	Pre-tax margin is defined as income before income taxes divided by net revenue.
(6)	Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation.

	June 30,			March 31,			December 31,			September 30,			June 30,
Capital Ratios	2023			2023			2022			2022			2022
Tier 1 capital (to average assets):
PlainsCapital		10.28	%		10.69	%		10.26	%		10.29	%		9.67	%
Hilltop		11.47	%		11.82	%		11.47	%		11.41	%		10.53	%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.51	%		14.97	%		14.98	%		14.68	%		14.65	%
Hilltop		17.63	%		17.99	%		18.23	%		17.45	%		17.24	%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.51	%		14.97	%		14.98	%		14.68	%		14.65	%
Hilltop		17.63	%		17.99	%		18.23	%		17.45	%		17.24	%
Total capital (to risk-weighted assets):
PlainsCapital		15.59	%		15.94	%		15.91	%		15.54	%		15.55	%
Hilltop		20.44	%		20.75	%		20.98	%		20.07	%		19.90	%

	June 30,			March 31,			December 31,			September 30,			June 30,
Non-Performing Assets Portfolio Data	2023			2023			2022			2022			2022
Loans accounted for on a non-accrual basis ($000's):
Commercial real estate		3,552			1,973			4,269			4,735			4,947
Commercial and industrial		21,442			10,807			9,095			12,078			13,315
Construction and land development		593			199			198			1			1
1-4 family residential		13,360			14,387			15,941			16,968			16,542
Consumer		9			12			14			16			19
Broker-dealer		—			—			—			—			—
		38,956			27,378			29,517			33,798			34,824
Troubled debt restructurings included in accruing loans held for investment ($000's)⁽¹⁾		—			—			803			825			857
Non-performing loans ($000's) ⁽¹⁾		38,956			27,378			30,320			34,623			35,681

Non-performing loans as a % of total loans ($000's) ⁽¹⁾		0.40	%		0.30	%		0.33	%		0.39	%		0.38	%

Other real estate owned ($000's)		3,481			3,202			2,325			1,637			1,516

Other repossessed assets ($000's)		—			—			—			—			—

Non-performing assets ($000's) ⁽¹⁾		42,437			30,580			32,645			36,260			37,197

Non-performing assets as a % of total assets ($000's) ⁽¹⁾		0.25	%		0.18	%		0.20	%		0.22	%		0.22	%

Loans past due 90 days or more and still accruing ($000's) ⁽²⁾		130,036			114,523			92,099			96,532			82,410

______________________________
(1)	Effective January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2022-02 which eliminated the recognition and measurement guidance on troubled debt restructurings for creditors. Therefore, we no longer present troubled debt restructurings as a component of non-performing loans and assets.
(2)	Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending.

	Three Months Ended June 30,
	2023							2022
	Average			Interest		Annualized		Average			Interest		Annualized
	Outstanding			Earned		Yield or		Outstanding			Earned		Yield or
Net Interest Margin (Taxable Equivalent) Details ⁽¹⁾	Balance			or Paid		Rate		Balance			or Paid		Rate
Assets
Interest-earning assets
Loans held for sale	$	1,043,526		$	14,125	5.41	%	$	1,375,395		$	14,302	4.16	%
Loans held for investment, gross ⁽²⁾		8,033,095			124,272	6.21	%		7,838,090			84,426	4.32	%
Investment securities - taxable		2,776,375			26,719	3.85	%		2,779,458			17,288	2.49	%
Investment securities - non-taxable ⁽³⁾		412,609			2,410	2.34	%		250,303			2,557	4.09	%
Federal funds sold and securities purchased under agreements to resell		123,219			2,190	7.13	%		193,851			481	1.00	%
Interest-bearing deposits in other financial institutions		1,711,945			21,273	4.98	%		2,602,154			4,984	0.77	%
Securities borrowed		1,477,502			18,515	4.96	%		1,273,368			10,498	3.26	%
Other		82,608			3,766	18.29	%		53,962			1,013	7.53	%
Interest-earning assets, gross ⁽³⁾		15,660,879			213,270	5.46	%		16,366,581			135,549	3.32	%
Allowance for credit losses		(97,387	)						(91,619	)
Interest-earning assets, net		15,563,492							16,274,962
Noninterest-earning assets		1,355,997							1,516,266
Total assets	$	16,919,489						$	17,791,228

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	7,736,582		$	54,726	2.84	%	$	7,768,772		$	5,456	0.28	%
Securities loaned		1,373,435			16,413	4.79	%		1,114,923			8,512	3.06	%
Notes payable and other borrowings		1,861,063			24,021	5.18	%		1,303,678			9,109	2.80	%
Total interest-bearing liabilities		10,971,080			95,160	3.48	%		10,187,373			23,077	0.91	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		3,540,643							4,552,424
Other liabilities		320,706							731,635
Total liabilities		14,832,429							15,471,432
Stockholders’ equity		2,060,677							2,292,816
Noncontrolling interest		26,383							26,980
Total liabilities and stockholders' equity	$	16,919,489						$	17,791,228

Net interest income ⁽³⁾				$	118,110						$	112,472
Net interest spread ⁽³⁾						1.98	%						2.41	%
Net interest margin ⁽³⁾						3.03	%						2.76	%

______________________________
(1)	Information presented on a consolidated basis.
(2)	Average balance includes non-accrual loans.
(3)	Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rate for the periods presented. The adjustment to interest income was $0.1 million and $0.4 million for the three months ended June 30, 2023 and 2022, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, July 21, 2023. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review second quarter 2023 financial results. Interested parties can access the conference call by dialing 1-888-886-7786 (North America) and then using the access code 19821733. The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop-holdings.com).

About Hilltop

Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Momentum Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At June 30, 2023, Hilltop employed approximately 4,075 people and operated approximately 344 locations in 48 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol “HTH.” Find more information at Hilltop-Holdings.com, PlainsCapital.com, PrimeLending.com and HilltopSecurities.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “building,” “continue,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “position,” “probable,” “progressing,” “projects,” “prudent,” “seeks,” “should,” “target,” “view,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (ii) effectiveness of our data security controls in the face of cyber attacks and any reputational risks following a cybersecurity incident; (iii) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (iv) changes in the interest rate environment; (v) risks associated with concentration in real estate related loans; (vi) disruptions to the economy and the U.S. banking system caused by recent bank failures, risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators, including increases in the cost of our deposit insurance assessments, and (vii) legal, reputational, and financial risks resulting from cybersecurity incidents. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.

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Contacts

Investor Relations Contact:

Erik Yohe

214-525-4634

eyohe@hilltop-holdings.com