Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-31987 Hilltop Holdings Inc. (Exact name of registrant as specified in its charter) Maryland 84-1477939 (State or other jurisdiction of incorporation or (I.R.S. Em ...

Financial Data and Key Metrics Changes - Hilltop reported net income of $18 million or $0.28 per diluted share for Q2 2023, with a return on average assets of 0.5% and return on average equity of 3.5% [14][29] - The allowance for credit losses increased by $12 million to $109 million, resulting in an allowance to total loans ratio of 1.31% as of June 30, 2023 [30][31] - Net interest income for the second quarter was $118 million, a year-over-year increase of $6 million or 6%, primarily due to higher yields on loans and securities [37][29] Business Line Data and Key Metrics Changes - The wealth management business saw revenue improvement due to higher short-term interest rates, despite weaker transactional production [8] - PrimeLending originated $2.5 million in volume, a decline of 36% from the same period last year, with only 6% of this volume being refinanced [11][9] - Hilltop Securities realized pretax income of $19 million on net revenues of $113 million, with a 13% increase in net revenues compared to the previous year [24] Market Data and Key Metrics Changes - Average loans at PlainsCapital Bank increased by $172 million in the quarter, approximately 9% annualized, but loan growth is expected to slow due to declining pipelines [16][17] - Total average deposits were approximately $11.3 billion, an increase of about $300 million or 3% from the previous quarter [43] - Non-interest income for Q2 2023 was $191 million, with mortgage-related income decreasing by $50 million due to challenges in the mortgage banking sector [47] Company Strategy and Development Direction - The company continues to prioritize balance sheet strength and capital preservation, focusing on long-term growth opportunities despite current macroeconomic challenges [15][27] - PrimeLending is resizing its business and reducing its expense base, including headcount reductions and branch consolidations, to adapt to the challenging mortgage market [22][23] - Hilltop maintains a competitive position in deposit pricing and plans to pass through future rate increases to clients [70][78] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the macroeconomic environment, including inflation and interest rates, which could lead to further credit migration [52][59] - The company expects interest rates to remain elevated, and it will continue to adopt a conservative approach in its operations [27][29] - Management noted that while credit quality remains solid, ongoing cash flow challenges could impact clients and the portfolio [59][60] Other Important Information - Hilltop maintains strong capital levels with a common equity Tier 1 capital ratio of 17.6% and tangible book value per share increased to $27.45 [26] - The company has approximately $7 billion in available liquidity sources as of June 30, 2023, with a revision of cash targets to between $750 million and $1.5 billion [40][41] Q&A Session Summary Question: Interest-bearing deposit beta expectations - Management indicated that the marginal interest-bearing deposit beta expectations are for 75% to 100% on any additional federal fund increases, reflecting a competitive market [66][70] Question: Broker deposits rate and term - Broker deposits added during the quarter ranged from 5% to 510 basis points with terms of 90 to 180 days [71] Question: Outlook for broker-dealer business - Management noted strength in sweep revenues and expects a stronger second half due to investments in fixed income and public finance services [78] Question: Margin compression expectations - Management anticipates potential NIM decline of 7 to 10 basis points for each incremental 25 basis point increase in rates [84] Question: Reserve increase mechanics - The reserve increase was primarily driven by a deterioration in the macroeconomic outlook, with over half of the build related to macroeconomic factors [89] Question: Deposit cost commentary - Management stated that most rate increases occurred in April and May, driven by customer demand for higher yields [97] Question: Exposure in office portfolio - The office portfolio exposure is primarily in larger metro areas like Dallas and Austin, with a focus on mid and low-rise buildings [100][101] Question: Buyback outlook - Management indicated that buybacks are not compelling at the moment due to the macroeconomic environment, but would consider if valuations dip significantly [102] Question: Competitive environment for deposit pricing - Management noted that the competitive landscape has stabilized, with no significant irrational behaviors observed among competitors [108]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-31987 Hilltop Holdings Inc. (Exact name of registrant as specified in its charter) Maryland 84-1477939 (State or other jurisdiction of incorporation or (I.R.S. E ...

Financial Data and Key Metrics Changes - Hilltop reported net income of $26 million or $0.40 per diluted share for Q1 2023, with a return on average assets of 0.7% and return on average equity of 5.1% [4] - The common equity Tier 1 risk-based capital ratio stood at 18%, and tangible book value per share increased by $0.18 to $27.36 from Q4 2022 [8] - Total deposits declined by 3% for the quarter, while core bank customer deposits only declined by approximately 1% [5][9] Business Line Data and Key Metrics Changes - PrimeLending originated $1.7 billion in volume, with a gain on sale margin of 193 basis points, reflecting a 54% decline in origination volume from the prior year [7] - PlainsCapital Bank generated $58 million of pretax income on $13.7 billion of assets, with average loans increasing by $133 million or 8% annualized [26] - Non-interest expenses decreased by $36 million to $250 million, primarily due to a decrease in variable compensation at PrimeLending [40] Market Data and Key Metrics Changes - Mortgage-related income and fees decreased by $74 million versus Q1 2022, driven by high interest rates and limited housing supply [59] - The gain-on-sale margin for loans sold to third parties declined by 18 basis points to 193 basis points [39] - Average total deposits were approximately $11 billion, declining by $350 million or 3% compared to Q4 2022 [37] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet and capital levels while adapting to market conditions [10][31] - Hilltop plans to reduce one to four family mortgage retention levels significantly for the remainder of 2023 due to current market conditions [20] - The company remains interested in M&A opportunities, particularly in Texas, and is looking for strategic fits in potential targets [71][93] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's liquidity position and ability to support customers despite industry volatility [4][6] - The outlook for the mortgage business remains challenging due to high interest rates and low housing inventory [28] - Management anticipates continued pressure on gain-on-sale margins and overall profitability in the mortgage sector [18][28] Other Important Information - The allowance for credit losses increased to $97.4 million, yielding an ACL to total loans HFI ratio of 1.19% [12] - The company repurchased $4.5 million of shares and declared a dividend of $0.16 during the quarter, an increase from the same period last year [9] - The company expects deposit competition to remain intense, impacting net interest income and margins [35] Q&A Session Summary Question: What actions are being taken to improve the mortgage business profitability? - Management acknowledged the challenges in the mortgage business and highlighted efforts to reduce fixed costs and right-size the business for a smaller market [68] Question: What is the expected effective tax rate for the remainder of the year? - The effective tax rate for the first quarter was low due to discrete items, with expectations of 24% to 26% for the remaining quarters [70] Question: Is M&A still a possibility in the current environment? - Management confirmed interest in M&A opportunities, particularly those that are strategic fits, and emphasized a strong balance sheet to support potential transactions [71][79]

Provision Expense / (Reversal) • Full year provision/ total loans HFI: 10 – 25 basis points Effective Tax Rate (GAAP) • 22 – 24% full year basis 14 Appendix HilltopHoldings True 15 PlainsCapital Bank – Q1 2023Highlights | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------------------------|---------|--------------|-------------------------------------|---------|---------| | Summary Results ($ in millions) | Q1 2022 | Q1 2023 | Key Highlights | Q1 2022 | Q1 2023 | | ...

Interest Rate Sensitivity - The banking segment's net interest income is significantly influenced by interest rate changes, with a positive GAP indicating potential increases in income as rates rise [606]. - As of December 31, 2022, the banking segment's total interest-sensitive assets amounted to $12.74 billion, while total interest-sensitive liabilities were $7.59 billion, resulting in an interest sensitivity gap of $5.15 billion [608]. - A 300 basis point increase in interest rates is projected to increase net interest income by $40.07 million, representing an 8.80% increase [610]. - The banking segment is currently asset sensitive, with a large percentage of loans adjusting to the Wall Street Journal Prime rate, which contributes to its overall sensitivity [607]. - The projected changes in net interest income are influenced by the heightened level of cash balances, which represent a significant portion of the bank's sensitivity [612]. Interest Rate Risk Management - The broker-dealer segment is exposed to market risk due to fluctuations in interest rates, market prices, and changes in credit ratings, impacting its role as a financial intermediary [614]. - Interest rate risk in the broker-dealer segment is managed by setting limits on the size and duration of positions, as well as monitoring the length of time securities can be held [616]. - The broker-dealer segment's funding sources include customer cash balances and bank borrowings, which expose it to interest rate risk from short-term rate movements [615]. - The company employs various derivative instruments to manage interest rate risk and hedge specific assets and liabilities [605]. Impact of Interest Rate Changes on Net Interest Income - The estimated impact of a 300 basis point increase in interest rates would result in a $99,932 thousand (17.56%) increase in net interest income [629]. - A 200 basis point increase in interest rates would lead to a $64,953 thousand (11.41%) increase in net interest income [629]. - A 100 basis point increase would result in a $33,327 thousand (5.86%) increase in net interest income [629]. - Conversely, a 50 basis point decrease in interest rates would decrease net interest income by $17,260 thousand (3.03%) [629]. - A 100 basis point decrease would lead to a $35,646 thousand (6.26%) decrease in net interest income [629]. - A 200 basis point decrease would result in a $75,696 thousand (13.30%) decrease in net interest income [629]. Mortgage Operations and Risk - The company has expanded its residential mortgage servicing operations, increasing its portfolio of retained mortgage servicing rights (MSR) [623]. - The mortgage origination segment is exposed to interest rate risk, which could materially affect the volume of mortgage loan originations [621]. - The company employs derivative financial instruments to mitigate market risk associated with MSR assets [623].

Financial Data and Key Metrics Changes - Hilltop reported consolidated income attributable to common stockholders of approximately $113 million or $1.60 per diluted share for the full year 2022, with a return on average assets of 0.6% and return on average equity of 5% [25][29] - Net interest income for the fourth quarter was $123 million, reflecting an increase of $19 million or 18% compared to the prior year, driven by higher yields on loans and securities [59] - The allowance for credit losses increased to $95 million, yielding an ACL to total loans HFI ratio of 1.18% as of year-end 2022 [9][78] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $58 million in pretax income with a return on average assets of 1.3%, although pretax income was down year-over-year due to changes in provision expense [75] - HilltopSecurities generated pre-tax income of $19.8 million on net revenues of $107 million, an increase of 13% compared to Q4 2021, primarily driven by fixed income services [76] - PrimeLending experienced a loss before taxes of approximately $26 million on $2 billion of originated volume, driven by a 59% decline in volume and a 151 basis point reduction in gain on sale margin [55] Market Data and Key Metrics Changes - Average total deposits decreased by approximately $1 billion or 8% year-over-year, with a decline in average deposits of $270 million or 2% quarter-over-quarter [33][54] - Purchase mortgage volumes decreased by $1.7 billion or 47%, and refinanced volumes decreased by $1.3 billion or 90% compared to the prior year [31] - The competitive environment for liquidity is expected to drive deposit rates higher throughout 2023, impacting net interest income [13][26] Company Strategy and Development Direction - The company is focused on enhancing productivity and expense efficiency across all business lines, particularly in mortgage operations, to align with current market conditions [7] - Hilltop aims to maintain a solid financial foundation with a strong balance sheet and ample liquidity, allowing for investment in business and resilience through economic cycles [77] - The company plans to continue evaluating its business on a weekly and quarterly basis to adapt to production trends and market conditions [85] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023, citing a solid foundation and strong leadership across Texas, despite acknowledging challenges in the mortgage market [5][57] - The management anticipates continued pressure on the mortgage segment due to rising interest rates and inflation, but expects to reach breakeven or profitability in the second half of the year [86] - The company is closely monitoring credit quality, with no significant signs of deterioration currently, but remains cautious due to economic uncertainties [5][9] Other Important Information - Hilltop returned $485 million to shareholders through dividends and share repurchase efforts, repurchasing approximately 19% of the shares outstanding [56] - The company declared a quarterly cash dividend of $0.16 per common share, a 7% increase from the prior quarter, and authorized a new stock repurchase program of $75 million [56] Q&A Session Summary Question: Steps taken to reduce the cost base in the Mortgage segment - Management indicated ongoing vigilance around cost management and rightsizing the business to drive profitability, with significant reductions in non-originator headcount [14][16] Question: Trajectory for margin trends - Management expects modest improvements in net interest income and net interest margin through the first half of 2023, with potential moderation in the second half due to competitive pressures [38][68] Question: Credit metrics and loan segments under review - Management is closely monitoring the entire loan portfolio, particularly floating rate loans and segments like office and hotel portfolios, due to the impact of rising interest rates [93][94] Question: Deposit guidance and balance sheet size - Management anticipates average deposits to decline by 4% to 8% for the year, with expectations that the overall size of the balance sheet will remain similar year-on-year [95]

January 27, 2023 Corporate Headquarters Additional Information Please Contact: Erik Yohe Phone: 214-525-4634 Email: eyohe@hilltop-holdings.com This presentation and statements made by representatives of Hilltop Holdings Inc. ("Hilltop" or the "Company") during the course of this presentation include "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 ...

Financial Performance - Net interest income for the three months ended September 30, 2022, was $123.5 million, an increase from $105.1 million in the same period of 2021, representing a growth of 17.8%[243] - Total noninterest income for the nine months ended September 30, 2022, was $662.7 million, down from $1.1 billion in the same period of 2021, reflecting a decrease of 41.1%[243] - Net income attributable to Hilltop for the three months ended September 30, 2022, was $32.1 million, compared to $92.9 million in the same period of 2021, a decline of 65.5%[243] - The diluted earnings per common share for the three months ended September 30, 2022, was $0.50, compared to $1.15 in the same period of 2021, a decrease of 56.5%[243] - Return on average stockholders' equity decreased to 6.26% for the three months ended September 30, 2022, from 14.96% in the same period of 2021[285] - Return on average assets fell to 0.79% for the three months ended September 30, 2022, compared to 2.13% in the same period of 2021[286] Dividends and Share Repurchase - The company declared and paid total common dividends of $33.5 million during the nine months ended September 30, 2022[245] - A quarterly cash dividend of $0.15 per common share was declared on October 20, 2022, payable on November 25, 2022[245] - The company completed a tender offer repurchasing 14,868,469 shares at a price of $29.75 per share for a total of $442.3 million, funded with cash on hand[246] Assets and Equity - Total assets as of September 30, 2022, were $16.6 billion, a decrease from $18.7 billion as of December 31, 2021[243] - The common equity to assets ratio was 12.23% as of September 30, 2022, down from 13.50% in the previous year[243] - Book value per common share increased to $31.46 as of September 30, 2022, compared to $31.36 in 2021[248] - Tangible common equity decreased to $1,752.155 million from $2,239.937 million year-over-year[248] - Total assets decreased to $16,615.291 million from $18,689.080 million year-over-year[248] - Equity to assets ratio was 12.23% as of September 30, 2022, down from 13.50% in 2021[248] Credit Losses and Provisions - The allowance for credit losses was $91.8 million as of September 30, 2022, compared to $91.4 million as of December 31, 2021[243] - Provision for credit losses for the banking segment showed a significant reversal, with a provision of $(650,000) for the three months ended September 30, 2022, compared to $(5.8 million) in the same period of 2021[272] - The provision for (reversal of) credit losses during the three months ended September 30, 2022, was a reversal of $650,000, compared to a provision of $5,775,000 in the same period of 2021, reflecting a $5,125,000 improvement[297] - The provision for credit losses during the nine months ended September 30, 2022, was driven by a deteriorating U.S. economic outlook[429] Economic Outlook - The company anticipates continued adverse impacts on operating results due to rising interest rates and inflationary pressures into the first half of 2023[257] - The U.S. Real GDP growth rate for Q3 2022 was 1.3%, while the forecast for Q4 2022 is 0.4%[427] - The unemployment rate is projected to peak at 6.2% by Q4 2023, with a forecasted decline in real GDP of 1.6% during the same period[427] - The economic forecast as of September 30, 2022, indicates a mild recession beginning in Q2 2023, with real GDP expected to decline by 1.6% through Q4 2023[427] Interest Income and Margin - The net interest margin improved to 3.19% for the three months ended September 30, 2022, compared to 2.53% in the same period of 2021[285] - The consolidated taxable equivalent net interest margin for the three months ended September 30, 2022, was 3.20%, compared to 2.54% for the same period in 2021[290] - The average interest-earning assets for the three months ended September 30, 2022, were $15.36 billion, compared to $16.49 billion in 2021[293] - The net interest spread for the nine months ended September 30, 2022, was 2.38%, up from 2.19% in 2021[293] - The banking segment's net interest margin exceeds the consolidated net interest margin due to specific items not reflected in the consolidated calculation[295] Mortgage Origination and Sales - The mortgage origination segment reported losses of $23.1 million and $11.0 million before income taxes for the three and nine months ended September 30, 2022[248] - The company experienced a significant decrease in net gains from mortgage origination, with $380.8 million in 2022 compared to $793.9 million in 2021[282] - Mortgage loan origination volume decreased by 45.6% and 39.9% for the three and nine months ended September 30, 2022, compared to the same periods in 2021[358] - Net gains from mortgage loan sales dropped to $74.696 million for the three months ended September 30, 2022, down from $214.093 million in 2021, representing a decrease of $139.397 million[363] Noninterest Income and Expenses - Noninterest income decreased by 44% to $207.0 million for the three months ended September 30, 2022, compared to $367.9 million in the same period of 2021[278] - Noninterest expense decreased to $60,160,000 for the three months ended September 30, 2022, from $54,567,000 in 2021, driven by lower compensation costs in the mortgage origination segment[299] - Noninterest income in the banking segment increased during the three months ended September 30, 2022, primarily due to increased wealth management fee income and service charges on depositor accounts[324] - Noninterest income in the broker-dealer segment decreased by $15.3 million during the three months ended September 30, 2022, compared to the same period in 2021[328] Regulatory and Compliance - The loan review department assesses credit risk and compliance with loan policy, presenting results to management and the board of directors[420] - The bank's loan policy includes specific underwriting guidelines for various portfolio segments, ensuring compliance with permissible loan types[418] - The macroeconomic forecasts used to estimate credit losses are subject to significant judgment and uncertainty, impacting the allowance for credit losses[423] - The COVID-19 pandemic continues to affect economic conditions and borrower defaults, requiring careful estimation of its impact on credit losses[422]

Hilltop Holdings Inc. Q3 2022Earnings Presentation October 21, 2022 Preface Corporate Headquarters Additional Information 6565 Hillcrest Ave Dallas, TX 75205 Phone: 214-855-2177 www.hilltop-holdings.com Please Contact: Erik Yohe Phone: 214-525-4634 Email: eyohe@hilltop-holdings.com FORWARD-LOOKING STATEMENTS This presentation and statements made by representatives of Hilltop Holdings Inc. ("Hilltop" or the "Company") during the course of this presentation include "forward-looking statements" within the mean ...