Hilltop Holdings (HTH) reported $285.24 million in revenue for the quarter ended March 2024, representing a year-over-year increase of 0.4%. EPS of $0.42 for the same period compares to $0.40 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $275.39 million, representing a surprise of +3.58%. The company delivered an EPS surprise of +50.00%, with the consensus EPS estimate being $0.28.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings - ...

Hilltop Holdings (HTH) came out with quarterly earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.28 per share. This compares to earnings of $0.40 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 50%. A quarter ago, it was expected that this insurance holding compnay would post earnings of $0.40 per share when it actually produced earnings of $0.44, delivering a surprise of 10%.Over the last four quarters, ...

[First Quarter 2024 Financial Results Overview](index=1&type=section&id=First%20Quarter%202024%20Financial%20Results%20Overview) Hilltop Holdings Inc.'s Q1 2024 financial results, including key performance, operational highlights, and corporate actions are presented [Executive Summary and Highlights](index=1&type=section&id=Executive%20Summary%20and%20Highlights) Hilltop Holdings Inc. reported increased Q1 2024 income and EPS, driven by credit reversal and broker-dealer growth [Key Financial Performance](index=1&type=section&id=Key%20Financial%20Performance) | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Income to common stockholders | $27.7 million | $25.8 million | +7.4% | | Diluted EPS | $0.42 | $0.40 | +5.0% | | Reversal of credit losses | $2.9 million | ($2.3 million provision) | N/A | | Consolidated ROAA | 0.74% | 0.69% | +0.05 pp | | Consolidated ROAE | 5.23% | 5.12% | +0.11 pp | | Book value per common share | $32.66 | $31.63 | +3.25% | | Noninterest income | $181.6 million | $162.5 million | +11.8% | | Noninterest expense | $250.0 million | $250.5 million | -0.2% | | Effective tax rate | 22.5% | 11.6% | +10.9 pp | [Operational Highlights and Market Trends](index=1&type=section&id=Operational%20Highlights%20and%20Market%20Trends) - Elevated interest rate environment continues to impact net interest margin primarily through increased borrowing costs[5](index=5&type=chunk) - Lack of housing inventory and pressured home buying affordability limited mortgage origination volumes[5](index=5&type=chunk) - PlainsCapital Bank produced an **annualized return on average assets** of **1.20%**, highlighting steady earnings power[12](index=12&type=chunk) - HilltopSecurities delivered a **pre-tax margin** of **16%** on net revenues of **$117 million**, primarily due to strong results from structured finance and wealth management business lines[12](index=12&type=chunk) - PrimeLending's results remain challenged due to elevated mortgage rates and suboptimal housing inventory[12](index=12&type=chunk) [Corporate Actions](index=1&type=section&id=Corporate%20Actions) - Board of Directors declared a **quarterly cash dividend** of **$0.17 per common share**, payable on May 24, 2024[4](index=4&type=chunk) - Repurchased **320,042 shares** of common stock for **$9.9 million** at an **average price** of **$31.04 per share** during Q1 2024[4](index=4&type=chunk) [Selected Financial Metrics](index=5&type=section&id=Selected%20Financial%20Metrics) Detailed financial metrics for Hilltop's consolidated, banking, broker-dealer, and mortgage segments are presented Hilltop Consolidated Selected Financial Data | Metric | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | | :----------------------------------- | :------------- | :---------------- | :----------------- | :------------ | :------------- | | Return on average stockholders' equity | 5.23% | 5.46% | 7.11% | 3.53% | 5.12% | | Return on average assets | 0.74% | 0.75% | 0.94% | 0.47% | 0.69% | | Net interest margin | 2.85% | 2.96% | 3.02% | 3.03% | 3.28% | | Book value per common share ($) | 32.66 | 32.58 | 31.91 | 31.71 | 31.63 | | Dividend payout ratio | 40.06% | 36.35% | 28.12% | 57.37% | 40.25% | Banking Segment Selected Financial Data | Metric | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | | :----------------------------------- | :------------- | :---------------- | :----------------- | :------------ | :------------- | | Net interest margin | 3.00% | 2.94% | 3.08% | 3.11% | 3.40% | | Net recoveries (charge-offs) ($000's)| (4,311) | (674) | 1,556 | (2,884) | (419) | | Return on average assets | 1.20% | 1.12% | 1.20% | 0.89% | 1.44% | | Fee income ratio | 11.5% | 11.2% | 10.5% | 10.0% | 9.6% | | Efficiency ratio | 54.1% | 53.2% | 51.4% | 51.2% | 48.4% | Broker-Dealer Segment Selected Financial Data | Metric | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | | :----------------------------------- | :------------- | :---------------- | :----------------- | :------------ | :------------- | | Net revenue ($000's) | 116,847 | 119,989 | 118,703 | 113,241 | 104,498 | | Compensation as a % of net revenue | 59.4% | 57.3% | 58.9% | 57.7% | 59.7% | | Pre-tax margin | 16.2% | 16.8% | 18.2% | 16.3% | 12.8% | Mortgage Origination Segment Selected Financial Data | Metric | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | | :----------------------------------- | :------------- | :---------------- | :----------------- | :------------ | :------------- | | Total mortgage loan originations - volume ($000's) | 1,676,486 | 1,815,027 | 2,243,701 | 2,451,650 | 1,732,753 | | Net gains from mortgage loan sales (basis points) | 216 | 189 | 198 | 201 | 186 | [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Hilltop Holdings Inc. reported slight decreases in assets and liabilities, with modest equity growth as of March 31, 2024 Consolidated Balance Sheet Highlights (March 31, 2024 vs. December 31, 2023) | Item | March 31, 2024 ($000's) | December 31, 2023 ($000's) | Change ($000's) | Change (%) | | :----------------------------------- | :---------------------- | :------------------------- | :-------------- | :--------- | | Total assets | 16,209,633 | 16,466,996 | (257,363) | -1.56% | | Cash and due from banks | 1,710,066 | 1,858,700 | (148,634) | -7.99% | | Loans held for sale | 842,324 | 943,846 | (101,522) | -10.76% | | Total deposits | 10,884,096 | 11,063,192 | (179,096) | -1.62% | | Total liabilities | 14,050,203 | 14,316,667 | (266,464) | -1.86% | | Total stockholders' equity | 2,159,430 | 2,150,329 | 9,101 | 0.42% | [Consolidated Income Statements](index=5&type=section&id=Consolidated%20Income%20Statements) Hilltop's Q1 2024 net interest income decreased, offset by credit loss reversal and increased noninterest income Consolidated Income Statement Highlights (Q1 2024 vs. Q4 2023 vs. Q1 2023) | Item | Q1 2024 ($000's) | Q4 2023 ($000's) | Q1 2023 ($000's) | | :----------------------------------- | :--------------- | :--------------- | :--------------- | | Total interest income | 209,614 | 216,767 | 191,427 | | Total interest expense | 105,993 | 105,541 | 69,722 | | Net interest income | 103,621 | 111,226 | 121,705 | | Provision for (reversal of) credit losses | (2,871) | 1,265 | 2,331 | | Total noninterest income | 181,618 | 178,978 | 162,494 | | Total noninterest expense | 250,023 | 250,845 | 250,470 | | Income before income taxes | 38,087 | 38,094 | 31,398 | | Net income | 29,522 | 30,962 | 27,768 | | Income attributable to Hilltop | 27,668 | 28,671 | 25,800 | [Segment Performance Analysis](index=5&type=section&id=Segment%20Performance%20Analysis) [Banking Segment](index=5&type=section&id=Banking%20Segment) The Banking segment showed solid Q1 2024 performance with positive net interest income and credit loss reversal, boosting pre-tax income Banking Segment Performance (Q1 2024) | Item | Amount ($000's) | | :----------------------------------- | :-------------- | | Net interest income | 91,606 | | Provision for (reversal of) credit losses | (2,853) | | Noninterest income | 11,903 | | Noninterest expense | 56,020 | | Income (loss) before taxes | 50,342 | [Broker-Dealer Segment](index=5&type=section&id=Broker-Dealer%20Segment) The Broker-Dealer segment achieved strong Q1 2024 noninterest income and positive pre-tax income despite minor credit loss reversal Broker-Dealer Segment Performance (Q1 2024) | Item | Amount ($000's) | | :----------------------------------- | :-------------- | | Net interest income (expense) | 12,269 | | Provision for (reversal of) credit losses | (18) | | Noninterest income | 104,578 | | Noninterest expense | 97,947 | | Income (loss) before taxes | 18,918 | [Mortgage Origination Segment](index=5&type=section&id=Mortgage%20Origination%20Segment) The Mortgage Origination segment faced Q1 2024 challenges, reporting net interest expense and a pre-tax loss due to difficult market conditions Mortgage Origination Segment Performance (Q1 2024) | Item | Amount ($000's) | | :----------------------------------- | :-------------- | | Net interest income (expense) | (4,252) | | Provision for (reversal of) credit losses | — | | Noninterest income | 66,700 | | Noninterest expense | 78,898 | | Income (loss) before taxes | (16,450) | [Capital and Asset Quality](index=6&type=section&id=Capital%20and%20Asset%20Quality) [Capital Ratios](index=6&type=section&id=Capital%20Ratios) Hilltop and PlainsCapital Bank maintained strong Q1 2024 capital levels, with key ratios showing improvements year-over-year Hilltop Capital Ratios | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Tier 1 capital (to average assets) | 12.49% | 12.23% | 11.82% | | Common equity Tier 1 capital (to risk-weighted assets) | 19.73% | 19.32% | 17.99% | | Total capital (to risk-weighted assets) | 22.79% | 22.34% | 20.75% | PlainsCapital Capital Ratios | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :----------------------------------- | :------------- | :---------------- | :------------- | | Tier 1 capital (to average assets) | 11.00% | 10.55% | 10.69% | | Common equity Tier 1 capital (to risk-weighted assets) | 15.87% | 15.44% | 14.97% | | Total capital (to risk-weighted assets) | 17.06% | 16.58% | 15.94% | [Net Interest Margin Analysis](index=7&type=section&id=Net%20Interest%20Margin%20Analysis) Hilltop's consolidated net interest margin decreased year-over-year, driven by higher borrowing costs and a narrower net interest spread - Consolidated **Net Interest Margin** (taxable equivalent) decreased to **2.87%** in Q1 2024 from **3.28%** in Q1 2023[15](index=15&type=chunk) - **Annualized yield** on interest-earning assets (gross) increased to **5.78%** in Q1 2024 from **5.16%** in Q1 2023[15](index=15&type=chunk) - **Annualized rate** on total interest-bearing liabilities increased to **4.06%** in Q1 2024 from **2.81%** in Q1 2023[15](index=15&type=chunk) - **Net interest spread** decreased to **1.72%** in Q1 2024 from **2.35%** in Q1 2023[15](index=15&type=chunk) [Non-Performing Assets Portfolio](index=7&type=section&id=Non-Performing%20Assets%20Portfolio) Hilltop's Q1 2024 showed improved asset quality with decreased non-accrual loans and total non-performing assets Non-Performing Assets (March 31, 2024 vs. December 31, 2023) | Item | March 31, 2024 ($000's) | December 31, 2023 ($000's) | | :----------------------------------- | :---------------------- | :------------------------- | | Non-accrual loans | 64,736 | 68,327 | | Non-accrual loans as a % of total loans | 0.73% | 0.76% | | Non-performing assets | 70,462 | 73,422 | | Non-performing assets as a % of total assets | 0.43% | 0.45% | - Non-accrual loans at March 31, 2024, included a reclassified non-owner occupied commercial real estate credit relationship within the hotel/motel portfolio[27](index=27&type=chunk) - Loans past due **90 days or more** and still accruing were **$112.8 million** at March 31, 2024, primarily comprised of loans held for sale and guaranteed by U.S. government agencies[21](index=21&type=chunk) [Company Information and Outlook](index=9&type=section&id=Company%20Information%20and%20Outlook) [About Hilltop Holdings Inc.](index=9&type=section&id=About%20Hilltop%20Holdings%20Inc.) Hilltop Holdings Inc. is a Dallas-based financial holding company with diverse operations in banking, mortgage lending, and securities brokerage - Dallas-based financial holding company with primary lines of business in banking, residential mortgage lending, and broker-dealer services[24](index=24&type=chunk) - Operates through PlainsCapital Bank, PrimeLending, Hilltop Securities Inc., and Momentum Independent Network Inc[24](index=24&type=chunk) - Employed approximately **3,740 people** and operated approximately **325 locations** in **48 states** as of March 31, 2024[24](index=24&type=chunk) [Conference Call Information](index=9&type=section&id=Conference%20Call%20Information) Hilltop Holdings Inc. will host a conference call and webcast on April 19, 2024, to discuss Q1 2024 financial results - Conference call and live webcast scheduled for Friday, April 19, 2024, at **8:00 AM Central (9:00 AM Eastern)**[23](index=23&type=chunk) - To be hosted by Hilltop President and CEO Jeremy B. Ford and CFO William B. Furr[23](index=23&type=chunk) - Access details provided for dialing in (**800-579-2543 / 785-424-1789, Conference ID HH1Q24**) and webcast (**http://ir.hilltop.com**)[23](index=23&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks and uncertainties, potentially causing actual results to differ materially - Contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[25](index=25&type=chunk) - Key risk factors include credit risks of lending activities, effectiveness of data security controls, changes in general economic and market conditions, changes in the interest rate environment, and risks associated with concentration in real estate related loans[25](index=25&type=chunk) - The company does not assume any duty to update forward-looking statements, except as required by law[25](index=25&type=chunk)

Investors are always looking for stocks that are poised to beat at earnings season and Hilltop Holdings Inc. (HTH) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.That is because Hilltop Holdings is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pre ...

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Hilltop Holdings (HTH) , which belongs to the Zacks Banks - Southeast industry.When looking at the last two reports, this insurance holding compnay has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 21.28%, on average, in the last two quarters.For the last reported quarter, Hilltop Holdings came out with earning ...

Wall Street expects a year-over-year decline in earnings on lower revenues when Hilltop Holdings (HTH) reports results for the quarter ended March 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-31987 Hilltop Holdings Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation ...

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for September 30, 2023, show total assets of $16.4 billion, with Q3 net income at $39.3 million and year-to-date net income at $87.0 million, influenced by credit loss provisions and mortgage banking income Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $16,396,858 | $16,259,282 | | Loans held for investment, net | $8,093,230 | $7,997,231 | | Total Deposits | $11,103,097 | $11,315,749 | | Total Liabilities | $14,289,996 | $14,195,753 | | Total Stockholders' Equity | $2,106,862 | $2,063,529 | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $115,650 | $123,486 | $355,622 | $335,533 | | Provision for (reversal of) credit losses | $(40) | $(780) | $17,127 | $4,671 | | Total Noninterest Income | $196,849 | $206,975 | $549,994 | $662,676 | | Net Income | $39,311 | $33,254 | $87,017 | $92,716 | | Diluted EPS | $0.57 | $0.50 | $1.25 | $1.21 | Consolidated Cash Flow Highlights - Nine Months Ended (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $179,910 | $1,235,811 | | Net cash provided by (used in) investing activities | $42,031 | $(695,808) | | Net cash used in financing activities | $(304,952) | $(1,697,661) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q3 2023 performance, noting increased net income to $37.0 million driven by broker-dealer strength, while year-to-date net income decreased to $81.0 million due to lower mortgage income and higher credit loss provisions amidst a volatile economic environment - The company's operations have been volatile due to economic headwinds, including tight housing inventories, declining deposit balances, rapid increases in market interest rates, and a volatile economic forecast[264](index=264&type=chunk) - In response to bank failures in early 2023 and increased competition for liquidity, the company increased interest-bearing deposit rates, accessed additional core deposits from its FDIC insured sweep program, and utilized brokered deposits to bolster its liquidity position[266](index=266&type=chunk)[267](index=267&type=chunk) Income (Loss) Before Taxes by Segment (in thousands) | Segment | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Banking | $53,153 | $63,629 | $151,225 | $161,461 | | Broker-Dealer | $21,553 | $17,471 | $53,428 | $17,967 | | Mortgage Origination | $(8,240) | $(23,084) | $(46,853) | $(10,961) | - During the nine months ended September 30, 2023, the company repurchased **144,403 shares** of common stock for **$4.5 million** under its **$75.0 million** stock repurchase program authorized through January 2024[205](index=205&type=chunk)[260](index=260&type=chunk) [Segment Results](index=57&type=section&id=Segment%20Results) The Banking segment's pre-tax income decreased in Q3 2023 due to net interest income compression, while the Broker-Dealer segment saw a significant increase, and the Mortgage Origination segment's losses narrowed despite declining volume Segment Income (Loss) Before Taxes - Q3 2023 vs Q3 2022 (in thousands) | Segment | Q3 2023 | Q3 2022 | Variance | | :--- | :--- | :--- | :--- | | Banking | $53,153 | $63,629 | $(10,476) | | Broker-Dealer | $21,553 | $17,471 | $4,082 | | Mortgage Origination | $(8,240) | $(23,084) | $14,844 | [Financial Condition](index=71&type=section&id=Financial%20Condition) As of September 30, 2023, total assets were $16.4 billion, with the securities portfolio decreasing to $2.9 billion and the loan portfolio growing modestly to $8.2 billion, accompanied by increased allowance for credit losses and slightly decreased deposits - The total securities portfolio decreased to **$2.86 billion** at September 30, 2023, from **$3.29 billion** at year-end 2022[415](index=415&type=chunk) - Net unrealized losses on the available-for-sale portfolio were **$150.1 million**, and on the held-to-maturity portfolio were **$121.7 million** as of September 30, 2023[415](index=415&type=chunk) Loan Portfolio Composition (in thousands) | Loan Type | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Commercial real estate | $3,285,899 | $3,245,873 | | Commercial and industrial | $1,662,737 | $1,639,980 | | Construction and land development | $1,088,701 | $980,896 | | 1-4 family residential | $1,783,259 | $1,767,099 | | Broker-dealer | $357,244 | $431,223 | | **Total Loans Held for Investment** | **$8,204,052** | **$8,092,673** | - The allowance for credit losses increased to **$110.8 million** at Q3 2023 from **$95.4 million** at year-end 2022, driven by a build related to loan portfolio changes and a deteriorating outlook for commercial real estate markets[424](index=424&type=chunk)[444](index=444&type=chunk) [Liquidity and Capital Resources](index=81&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity and capital position, with holding company cash increasing to $198.9 million and the Bank having $7.3 billion in available liquidity, while regulatory capital ratios remain well above 'well capitalized' thresholds - At the holding company level, cash and cash equivalents increased to **$198.9 million** at September 30, 2023, from **$172.5 million** at year-end 2022[486](index=486&type=chunk) Bank Segment Available Liquidity (in millions) | Source | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | FHLB capacity | $4,387 | $4,139 | | Investment portfolio (available) | $1,588 | $1,606 | | Fed deposits (excess) | $1,326 | $1,332 | | **Total** | **$7,301** | **$7,077** | Regulatory Capital Ratios (September 30, 2023) | Ratio | Hilltop | PlainsCapital | Minimum Requirement (incl. buffer) | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 | 18.60% | 15.31% | 7.0% | | Tier 1 Capital | 18.60% | 15.31% | 8.5% | | Total Capital | 21.54% | 16.45% | 10.5% | | Tier 1 Leverage | 11.92% | 10.62% | 4.0% | [Quantitative and Qualitative Disclosures About Market Risk](index=87&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity, impacting net interest income across segments, with the banking segment being asset sensitive and the mortgage segment hedging its interest rate lock commitments and mortgage servicing rights - The company's primary market risk is sensitivity to changes in interest rates, which significantly impacts net interest income[523](index=523&type=chunk)[524](index=524&type=chunk) Banking Segment - Estimated Impact of Interest Rate Changes (as of Sep 30, 2023) | Change in Rates (bps) | Change in Net Interest Income (12-month, Millions) | Change in Economic Value of Equity (Millions) | | :--- | :--- | :--- | | +200 | +$33.6 | +$132.8 | | +100 | +$18.1 | +$87.4 | | -100 | -$19.0 | -$144.7 | - The mortgage origination segment's principal market exposure is interest rate risk on its mortgage loans held for sale, IRLCs, and MSR portfolio, which it mitigates using forward commitments and other derivatives[543](index=543&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) [Controls and Procedures](index=91&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the third quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[553](index=553&type=chunk) - No changes in internal control over financial reporting occurred during the third fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[554](index=554&type=chunk) [PART II — OTHER INFORMATION](index=92&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=92&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a **$13.0 million** FINRA claim against Hilltop Securities and an ongoing investigative inquiry into PrimeLending's float down option - Hilltop Securities is defending a FINRA claim from WR Investments, LP, which alleges a **$13.0 million** loss related to the sale of subordinated bonds. Hilltop Securities believes the claims are without merit[166](index=166&type=chunk) - PrimeLending received an investigative inquiry from the U.S. Attorney for the Western District of Virginia regarding its float down option and is cooperating with requests for information[167](index=167&type=chunk) [Risk Factors](index=92&type=section&id=Item%201A.%20Risk%20Factors) The company highlights material changes to its risk factors, including potential adverse effects from financial industry instability and increasing cybersecurity risks, exemplified by a recent data breach involving a third-party vendor - A new risk factor addresses the potential adverse effects from financial industry instability, such as the bank failures in early 2023, which could lead to deposit outflows, increased costs, and reputational risk[559](index=559&type=chunk)[560](index=560&type=chunk) - The company disclosed a cybersecurity incident involving a third-party vendor's use of the MOVEit Transfer Application, which likely resulted in an unauthorized party obtaining data on substantially all of the Bank's customers, including social security and account numbers[563](index=563&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=94&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common stock during Q3 2023, with **$70.5 million** remaining available under its stock repurchase program authorized through January 2024 - No shares of common stock were repurchased during the third quarter of 2023[568](index=568&type=chunk) - As of September 30, 2023, **$70.5 million** remained available under the company's stock repurchase program, which is authorized through January 2024[569](index=569&type=chunk) [Other Information](index=94&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter of 2023 - No directors or executive officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2023[570](index=570&type=chunk) [Exhibits](index=94&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including required certifications from the Principal Executive Officer and Principal Financial Officer, and XBRL data files

Financial Data and Key Metrics Changes - Hilltop reported net income of $37 million or $0.57 per diluted share for Q3 2023, with a return on average assets of 0.9% and return on average equity of 7.1% [14][30] - Net interest income decreased by $7.8 million or 6% year-over-year to $116 million, primarily due to higher yields on deposits [7][30] - The allowance for credit losses increased by $1.5 million to $110.8 million, resulting in an allowance for credit losses to total loans held for investment ratio of 1.35% [31][30] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $53 million of pre-tax income on $13.3 billion of assets, with a return on average assets of 1.2% [16] - Prime lending originated $2.2 billion in volume, a decline of 26% from the same period last year, with gain on sale margin decreasing from 218 basis points to 198 basis points year-over-year [22][23] - Hilltop Securities generated pre-tax income of $22 million on net revenues of $119 million, with improved margins due to higher contribution from higher margin businesses [25] Market Data and Key Metrics Changes - Total non-interest income for Q3 2023 was $197 million, with mortgage-related income and fees decreasing by $9 million year-over-year due to challenges in mortgage banking [37] - Purchase mortgage volumes decreased by $741 million or 26% year-over-year, while refinance volumes decreased by $159 million or 28% [38] - Average total deposits were approximately $11.2 billion, remaining stable, but interest-bearing deposit costs rose to 323 basis points, an increase of 39 basis points from the prior quarter [35][36] Company Strategy and Development Direction - The company is focused on managing margins, maintaining credit quality, and reducing expenses to navigate the challenging environment [19][24] - Strategic initiatives include optimizing operations, reevaluating staffing levels, and enhancing the sales force to improve profitability in the mortgage market [21][24] - The company aims to prioritize balance sheet strength and long-term stockholder value while adapting to market changes [28][48] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing uncertainty regarding interest rates, inflation, and economic health, but expressed confidence in the company's resilience and adaptability [48] - The outlook reflects expectations of further declines in net interest income and net interest margin due to competitive pressures and rising deposit costs [8][73] - Management highlighted that while credit quality remains stable, they are closely monitoring potential risks in the commercial real estate sector [45][47] Other Important Information - Hilltop maintains a common equity Tier 1 capital ratio of 18.6%, with tangible book value per share increasing to $27.67 [27] - The company has approximately $7.3 billion in available liquidity sources as of September 30, 2023 [9] Q&A Session Summary Question: Insights on C&I contraction - The decline was primarily driven by a decrease in mortgage warehouse lending, which accounted for over $90 million of the contraction [55] Question: Expectations for Q4 performance in broker-dealer - Management is optimistic about the public finance business building throughout the year, expecting a solid fourth quarter [57] Question: Appetite for stock buybacks given current trading near tangible book value - Management indicated a cautious approach to buybacks in the current environment, focusing on capital deployment through M&A opportunities [60][63] Question: Increase in special mention loans - A few credits moved into special mention due to cash flow challenges, with management actively monitoring these clients [67] Question: Trends in non-interest bearing deposits - A consistent trend of decline in non-interest bearing deposits is expected as customers shift to interest-bearing products [70][71] Question: Future expectations for NII and NIM - Management expects both NII and NIM to continue trending lower, with NIM projected to be between 2.90% and 3% [73]

Q2 2023Earnings Presentation Preface 6565 Hillcrest Ave Dallas, TX 75205 Phone: 214-855-2177 www.hilltop-holdings.com FORWARD-LOOKING STATEMENTS The information contained herein is preliminary and based on Company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying slides. Hilltop Holdings does not undertake an obligation to, and disclaims any duty to, update any of the information herein. Q2 2023 • Average bank loans HFI1in ...