Hilltop Holdings Inc. Announces Financial Results for Second Quarter 2022

July 21, 2022 04:45 PM Eastern Daylight Time

DALLAS--(BUSINESS WIRE)--Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the second quarter of 2022. Hilltop produced income to common stockholders of $33.3 million, or $0.45 per diluted share, for the second quarter of 2022, compared to $99.1 million, or $1.21 per diluted share, for the second quarter of 2021. Hilltop’s financial results for the second quarter of 2022 reflect a significant decrease in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income and an increase in the banking segment’s provision for credit losses due to a deteriorating U.S. economic outlook.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per common share payable on August 26, 2022, to all common stockholders of record as of the close of business on August 12, 2022. Additionally, during the second quarter of 2022, Hilltop paid $442.3 million to repurchase approximately 14.87 million shares of its common stock at a price of $29.75 per share pursuant to the tender offer completed in May 2022. These shares were returned to the pool of authorized but unissued shares of common stock. As a result of share repurchases during 2022, Hilltop has no further available share repurchase capacity associated with its previously authorized stock repurchase program.

Identified headwinds during 2022, including tight housing inventories on mortgage volumes, declining deposit balances, increases in market interest rates, and uncertainties related to inflationary pressures on expenses, coupled with a declining economic forecast, rapid increases in the 10-year U.S. treasury bond yield and mortgage interest rates, and exposure to increasing funding costs during the first half of 2022 have had, and are expected to continue to have, an adverse impact on our operating results during the remainder of 2022. The COVID-19 pandemic may also continue to adversely impact financial markets and overall economic conditions. The extent of the impact of the pandemic on our operational and financial performance for the remainder of 2022 remains uncertain.

Jeremy B. Ford, President and CEO of Hilltop, said, “Our second quarter results demonstrate again the value of the Hilltop business model, despite a challenging economic environment. PlainsCapital Bank performed well with another quarter of solid loan growth and healthy credit metrics across the loan portfolio. Additionally, the Bank realized net interest margin expansion as it prudently manages deposit costs and captures the benefits of the rising rate environment. PrimeLending and HilltopSecurities experienced a continuation of the challenging market faced in the first quarter with elevated and volatile interest rates paired with lower demand for new home purchases. Importantly, both PrimeLending and HilltopSecurities were profitable during these challenging times as a result of strong expense discipline and experienced management teams.

“We were also pleased to return meaningful capital to stockholders through a successful tender offer in May. This transaction demonstrates our conviction in the long-term strategy of Hilltop, as we bought back almost 19% of the outstanding shares while still retaining excess capital for future growth.”

Second Quarter 2022 Highlights for Hilltop:

The provision for credit losses was $5.3 million during the second quarter of 2022, compared to a provision for credit losses of $0.1 million in the first quarter of 2022 and a reversal of credit losses of $28.7 million in the second quarter of 2021;
- The provision for credit losses during the second quarter of 2022 primarily reflected an increase in the expected lifetime credit losses under CECL on collectively evaluated loans within the portfolio attributable to a deteriorating U.S. economic outlook since the prior quarter, partially offset by decreases in specific reserves and positive risk rating grade migration.
For the second quarter of 2022, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $139.9 million, compared to $241.8 million in the second quarter of 2021, a 42.1% decrease;
- Mortgage loan origination production volume was $3.8 billion during the second quarter of 2022, compared to $5.9 billion in the second quarter of 2021;
- Net gains from mortgage loans sold to third parties decreased to 260 basis points during the second quarter of 2022, compared to 321 basis points in the first quarter of 2022.
Hilltop’s consolidated annualized return on average assets and return on average equity for the second quarter of 2022 were 0.80% and 5.82%, respectively, compared to 2.29% and 16.42%, respectively, for the second quarter of 2021;
Hilltop’s book value per common share increased to $31.43 at June 30, 2022, compared to $31.02 at March 31, 2022;
Hilltop’s total assets were $16.7 billion and $18.4 billion at June 30, 2022 and March 31, 2022, respectively;
Loans¹, net of allowance for credit losses, increased to $7.4 billion at June 30, 2022 compared to $7.2 billion at March 31, 2022;
Non-performing loans were $35.7 million, or 0.38% of total loans, at June 30, 2022, compared to $44.3 million, or 0.47% of total loans, at March 31, 2022;
Loans held for sale decreased by 9.3% from March 31, 2022 to $1.5 billion at June 30, 2022;
Total deposits were $11.9 billion and $12.7 billion at June 30, 2022 and March 31, 2022, respectively;
Hilltop maintained strong capital levels² with a Tier 1 Leverage Ratio³ of 10.53% and a Common Equity Tier 1 Capital Ratio of 17.24% at June 30, 2022;
Hilltop’s consolidated net interest margin⁴increased to 2.75% for the second quarter of 2022, compared to 2.36% in the first quarter of 2022;
- Includes previously deferred interest income of $1.3 million during the second quarter of 2022 related to PPP loan-related origination fees, compared to $5.4 million in the second quarter of 2021.
For the second quarter of 2022, noninterest income was $239.3 million, compared to $339.9 million in the second quarter of 2021, a 29.6% decrease;
For the second quarter 2022, noninterest expense was $298.5 million, compared to $343.4 million in the second quarter of 2021, a 13.1% decrease; and
Hilltop’s effective tax rate was 25.6% during the second quarter of 2022, compared to 23.5% during the same period in 2021.
- The effective tax rate for the second quarter of 2022 was higher than the applicable statutory rate primarily due to the impact of non-deductible compensation expense and other permanent adjustments.

________________________________________
¹	“Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $462.4 million and $506.2 million at June 30, 2022 and March 31, 2022, 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)	2022			2022			2021			2021			2021
Cash and due from banks	$	1,783,554		$	2,886,812		$	2,823,138		$	2,463,111		$	1,372,818
Federal funds sold		381			383			385			406			387
Assets segregated for regulatory purposes		120,816			128,408			221,740			269,506			207,284
Securities purchased under agreements to resell		139,929			256,991			118,262			155,908			202,638
Securities:
Trading, at fair value		593,273			471,763			647,998			609,813			682,483
Available for sale, at fair value, net		1,562,222			1,462,340			2,130,568			1,994,183			1,817,807
Held to maturity, at amortized cost, net		920,583			953,107			267,684			277,419			288,776
Equity, at fair value		197			225			250			221			193
		3,076,275			2,887,435			3,046,500			2,881,636			2,789,259
Loans held for sale		1,491,579			1,643,994			1,878,190			2,108,878			2,885,458
Loans held for investment, net of unearned income		7,930,619			7,797,903			7,879,904			7,552,926			7,645,227
Allowance for credit losses		(95,298	)		(91,185	)		(91,352	)		(109,512	)		(115,269	)
Loans held for investment, net		7,835,321			7,706,718			7,788,552			7,443,414			7,529,958

Broker-dealer and clearing organization receivables		1,049,830			1,610,352			1,672,946			1,419,652			1,403,447
Premises and equipment, net		195,361			198,906			204,438			210,026			212,402
Operating lease right-of-use assets		106,806			108,180			112,328			115,942			115,698
Mortgage servicing assets		121,688			100,475			86,990			110,931			124,497
Other assets		513,570			546,622			452,880			526,339			535,536
Goodwill		267,447			267,447			267,447			267,447			267,447
Other intangible assets, net		13,182			14,233			15,284			16,455			17,705
Total assets	$	16,715,739		$	18,356,956		$	18,689,080		$	17,989,651		$	17,664,534

Deposits:
Noninterest-bearing	$	4,601,643		$	4,694,592		$	4,577,183		$	4,433,148		$	4,231,082
Interest-bearing		7,319,143			7,972,110			8,240,894			7,699,014			7,502,703
Total deposits		11,920,786			12,666,702			12,818,077			12,132,162			11,733,785
Broker-dealer and clearing organization payables		934,818			1,397,836			1,477,300			1,496,923			1,439,620
Short-term borrowings		822,649			835,054			859,444			747,040			915,919
Securities sold, not yet purchased, at fair value		135,968			97,629			96,586			113,064			132,950
Notes payable		389,722			395,479			387,904			395,804			396,653
Operating lease liabilities		124,406			125,919			130,960			134,296			134,019
Junior subordinated debentures		—			—			—			—			67,012
Other liabilities		329,987			347,742			369,606			468,020			348,200
Total liabilities		14,658,336			15,866,361			16,139,877			15,487,309			15,168,158

Common stock		646			794			790			790			812
Additional paid-in capital		1,039,261			1,275,649			1,274,446			1,270,272			1,302,439
Accumulated other comprehensive income (loss)		(95,279	)		(80,565	)		(10,219	)		367			7,093
Retained earnings		1,085,208			1,267,415			1,257,014			1,204,307			1,159,304
Deferred compensation employee stock trust, net		695			744			752			751			754
Employee stock trust		(954	)		(104	)		(115	)		(116	)		(121	)
Total Hilltop stockholders' equity		2,029,577			2,463,933			2,522,668			2,476,371			2,470,281
Noncontrolling interests		27,826			26,662			26,535			25,971			26,095
Total stockholders' equity		2,057,403			2,490,595			2,549,203			2,502,342			2,496,376
Total liabilities & stockholders' equity	$	16,715,739		$	18,356,956		$	18,689,080		$	17,989,651		$	17,664,534


	Three Months Ended
Consolidated Income Statements	June 30,		March 31,		December 31,			September 30,			June 30,
(in 000's, except per share data)	2022		2022		2021			2021			2021
Interest income:
Loans, including fees	$	98,728	$	90,408	$	96,104		$	99,769		$	104,162
Securities borrowed		10,498		8,817		8,524			8,585			15,586
Securities:
Taxable		17,288		15,581		13,916			12,341			11,125
Tax-exempt		2,141		2,419		2,639			2,687			2,338
Other		6,478		2,312		1,872			1,796			1,607
Total interest income		135,133		119,537		123,055			125,178			134,818

Interest expense:
Deposits		5,456		4,193		4,404			5,303			6,176
Securities loaned		8,512		7,472		6,624			6,519			12,345
Short-term borrowings		3,020		2,045		2,279			2,400			2,374
Notes payable		3,809		4,437		5,871			5,465			5,253
Junior subordinated debentures		—		—		—			419			577
Other		2,280		1,399		(417	)		(18	)		177
Total interest expense		23,077		19,546		18,761			20,088			26,902

Net interest income		112,056		99,991		104,294			105,090			107,916
Provision for (reversal of) credit losses		5,336		115		(18,565	)		(5,819	)		(28,720	)
Net interest income after provision for (reversal of) credit losses		106,720		99,876		122,859			110,909			136,636

Noninterest income:
Net gains from sale of loans and other mortgage production income		97,543		110,894		156,103			203,152			199,625
Mortgage loan origination fees		42,378		32,062		35,930			38,780			42,146
Securities commissions and fees		34,757		37,146		32,801			34,412			38,300
Investment and securities advisory fees and commissions		32,002		29,705		42,834			49,646			32,268
Other		32,593		6,621		17,178			41,955			27,560
Total noninterest income		239,273		216,428		284,846			367,945			339,899

Noninterest expense:
Employees' compensation and benefits		205,327		200,019		229,717			258,679			248,486
Occupancy and equipment, net		24,231		24,766		25,741			25,428			25,004
Professional services		16,246		10,063		9,904			14,542			16,239
Other		52,739		51,502		56,832			56,525			53,639
Total noninterest expense		298,543		286,350		322,194			355,174			343,368

Income before income taxes		47,450		29,954		85,511			123,680			133,167
Income tax expense		12,127		5,815		20,715			28,257			31,234
Net income		35,323		24,139		64,796			95,423			101,933
Less: Net income attributable to noncontrolling interest		2,063		1,889		2,611			2,517			2,873
Income attributable to Hilltop	$	33,260	$	22,250	$	62,185		$	92,906		$	99,060

Earnings per common share:
Basic	$	0.45	$	0.28	$	0.79		$	1.16		$	1.21
Diluted	$	0.45	$	0.28	$	0.78		$	1.15		$	1.21

Cash dividends declared per common share	$	0.15	$	0.15	$	0.12		$	0.12		$	0.12

Weighted average shares outstanding:
Basic		73,693		79,114		78,933			80,109			81,663
Diluted		73,838		79,356		79,427			80,542			82,199


	Three Months Ended June 30, 2022
Segment Results					Mortgage						All Other and			Hilltop
(in 000's)	Banking		Broker-Dealer		Origination			Corporate			Eliminations			Consolidated
Net interest income (expense)	$	101,259	$	12,578	$	(1,291	)	$	(3,190	)	$	2,700		$	112,056
Provision for (reversal of) credit losses		5,025		311		—			—			—			5,336
Noninterest income		12,467		87,651		140,082			2,080			(3,007	)		239,273
Noninterest expense		57,331		90,817		133,169			17,561			(335	)		298,543
Income (loss) before taxes	$	51,370	$	9,101	$	5,622		$	(18,671	)	$	28		$	47,450


	Six Months Ended June 30, 2022
Segment Results					Mortgage						All Other and			Hilltop
(in 000's)	Banking		Broker-Dealer		Origination			Corporate			Eliminations			Consolidated
Net interest income (expense)	$	193,329	$	24,096	$	(3,127	)	$	(6,580	)	$	4,329		$	212,047
Provision for (reversal of) credit losses		4,975		476		—			—			—			5,451
Noninterest income		25,237		148,341		283,276			3,846			(4,999	)		455,701
Noninterest expense		115,761		171,464		268,027			30,354			(713	)		584,893
Income (loss) before taxes	$	97,830	$	497	$	12,122		$	(33,088	)	$	43		$	77,404


	Three Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,
Selected Financial Data	2022		2022		2021		2021		2021

Hilltop Consolidated:
Return on average stockholders' equity		5.82%		3.60%		9.93%		14.96%		16.42%
Return on average assets		0.80%		0.53%		1.41%		2.13%		2.29%
Net interest margin ⁽¹⁾		2.75%		2.36%		2.44%		2.53%		2.62%
Net interest margin (taxable equivalent) ⁽²⁾:
As reported		2.76%		2.37%		2.45%		2.54%		2.63%
Impact of purchase accounting		8 bps		7 bps		12 bps		9 bps		16 bps
Book value per common share ($)		31.43		31.02		31.95		31.36		30.44
Shares outstanding, end of period (000's)		64,576		79,439		78,965		78,959		81,153
Dividend payout ratio ⁽³⁾		33.33%		53.57%		15.19%		10.34%		9.92%

Banking Segment:
Net interest margin ⁽¹⁾		2.97%		2.65%		2.81%		2.99%		3.19%
Net interest margin (taxable equivalent)⁽²⁾:
As reported		2.98%		2.65%		2.82%		3.00%		3.20%
Impact of purchase accounting		10 bps		8 bps		15 bps		11 bps		20 bps
Accretion of discount on loans ($000's)		3,011		2,510		4,716		3,221		6,001
Net recoveries (charge-offs) ($000's)		(1,223)		(282)		405		62		(510)
Return on average assets		1.09%		0.98%		1.44%		1.36%		1.91%
Fee income ratio		11.0%		12.2%		10.8%		10.5%		8.9%
Efficiency ratio		50.4%		55.7%		54.2%		48.8%		49.7%
Employees' compensation and benefits ($000's)		33,554		33,517		34,415		31,500		33,369

Broker-Dealer Segment:
Net revenue ($000's) ⁽⁴⁾		100,229		72,209		94,569		126,570		94,145
Employees' compensation and benefits ($000's)		64,494		55,825		65,301		82,429		62,289
Variable compensation expense ($000's)		37,471		26,625		35,939		53,505		34,409
Compensation as a % of net revenue		64.3%		77.3%		69.1%		65.1%		66.2%
Pre-tax margin ⁽⁵⁾		9.1%		(11.9)%		1.8%		13.8%		7.3%

Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		3,342,103		2,753,031		3,559,137		3,948,420		4,018,922
Refinancings		467,117		1,011,452		1,430,369		1,646,208		1,881,121
Total mortgage loan originations - volume		3,809,220		3,764,483		4,989,506		5,594,628		5,900,043
Mortgage loan sales - volume ($000's)		3,872,935		3,868,596		4,988,538		6,195,559		5,524,226
Net gains from mortgage loan sales (basis points):
Loans sold to third parties		260		321		362		359		376
Impact of loans retained by banking segment		(7)		(9)		(15)		(13)		(12)
As reported		253		312		347		346		364
Mortgage servicing rights asset ($000's) ⁽⁶⁾		121,688		100,475		86,990		110,931		124,497
Employees' compensation and benefits ($000's)		100,206		102,748		121,758		134,814		145,401
Variable compensation expense ($000's)		56,525		56,243		73,208		88,153		97,081

____________________________________________
(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 $0.4 million, $0.5 million, $0.5 million, $0.6 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	2022			2022			2021			2021			2021
Tier 1 capital (to average assets):
PlainsCapital		9.67	%		9.74	%		10.20	%		10.02	%		10.22	%
Hilltop		10.53	%		12.46	%		12.58	%		12.64	%		12.87	%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.65	%		15.37	%		16.00	%		15.40	%		15.00	%
Hilltop		17.24	%		21.27	%		21.22	%		21.28	%		20.22	%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.65	%		15.37	%		16.00	%		15.40	%		15.00	%
Hilltop		17.24	%		21.27	%		21.22	%		21.28	%		20.82	%
Total capital (to risk-weighted assets):
PlainsCapital		15.55	%		16.18	%		16.77	%		16.32	%		15.95	%
Hilltop		19.90	%		23.85	%		23.75	%		24.00	%		23.48	%


	June 30,			March 31,			December 31,			September 30,			June 30,
Non-Performing Assets Portfolio Data	2022			2022			2021			2021			2021
Loans accounted for on a non-accrual basis ($000's) ⁽¹⁾:
Commercial real estate		4,947			6,153			6,601			5,705			7,211
Commercial and industrial		13,315			18,486			22,478			29,808			33,033
Construction and land development		1			1			2			366			474
1-4 family residential		16,542			18,723			21,123			25,255			27,100
Consumer		19			21			23			24			26
Broker-dealer		—			—			—			—			—
		34,824			43,384			50,227			61,158			67,844
Troubled debt restructurings included in accruing loans held for investment ($000's)		857			890			922			1,038			1,139
Non-performing loans ($000's)		35,681			44,274			51,149			62,196			68,983

Non-performing loans as a % of total loans		0.38	%		0.47	%		0.52	%		0.64	%		0.66	%

Other real estate owned ($000's)		1,516			2,175			2,833			21,605			21,078

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

Non-performing assets ($000's)		37,197			46,449			53,982			83,801			90,061

Non-performing assets as a % of total assets		0.22	%		0.25	%		0.29	%		0.47	%		0.51	%

Loans past due 90 days or more and still accruing ($000's) ⁽²⁾:		82,410			87,489			60,775			175,734			245,828

_____________________________________
(1)	Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications through January 1, 2022. The Bank’s COVID-19 payment deferral programs since the second quarter of 2020 allowed for a deferral of principal and/or interest payments with such deferred principal payments due and payable on the maturity date of the existing loan. For the periods presented, the Bank’s actions through December 31, 2021 included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $4 million, $17 million and $76 million as of December 31, 2021, September 30, 2021 and June 30, 2021, respectively.
(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,
	2022							2021
	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	$	1,375,395		$	14,302	4.16	%	$	2,450,897		$	17,128	2.80	%
Loans held for investment, gross ⁽²⁾		7,838,090			84,426	4.32	%		7,725,906			87,034	4.48	%
Investment securities - taxable		2,779,458			17,288	2.49	%		2,443,486			11,106	1.82	%
Investment securities - non-taxable ⁽³⁾		250,303			2,557	4.09	%		320,685			2,731	3.41	%
Federal funds sold and securities purchased under agreements to resell		193,851			481	1.00	%		159,400			—	0.00	%
Interest-bearing deposits in other financial institutions		2,602,154			4,984	0.77	%		1,861,861			628	0.14	%
Securities borrowed		1,273,368			10,498	3.26	%		1,490,097			15,586	4.14	%
Other		53,962			1,013	7.53	%		49,579			994	8.04	%
Interest-earning assets, gross ⁽³⁾		16,366,581			135,549	3.32	%		16,501,911			135,207	3.26	%
Allowance for credit losses		(91,619	)						(144,105	)
Interest-earning assets, net		16,274,962							16,357,806
Noninterest-earning assets		1,516,266							1,475,422
Total assets	$	17,791,228						$	17,833,228

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	7,768,772		$	5,456	0.28	%	$	7,740,066		$	6,176	0.32	%
Securities loaned		1,114,923			8,512	3.06	%		1,411,961			12,345	3.51	%
Notes payable and other borrowings		1,303,678			9,109	2.80	%		1,271,609			8,381	2.64	%
Total interest-bearing liabilities		10,187,373			23,077	0.91	%		10,423,636			26,902	1.03	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		4,552,424							4,090,425
Other liabilities		731,635							872,916
Total liabilities		15,471,432							15,386,977
Stockholders’ equity		2,292,816							2,420,436
Noncontrolling interest		26,980							25,815
Total liabilities and stockholders' equity	$	17,791,228						$	17,833,228

Net interest income ⁽³⁾				$	112,472						$	108,305
Net interest spread ⁽³⁾						2.41	%						2.23	%
Net interest margin ⁽³⁾						2.76	%						2.63	%

_______________________________________
(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 rates for the periods presented. The adjustment to interest income was $0.4 million and $0.4 million for the three months ended June 30, 2022 and 2021, 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 22, 2022. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review second quarter 2022 financial results. Interested parties can access the conference call by dialing 1-844-200-6205 (United States), 1-833-950-0062 (Canada) or 1-929-526-1599 (all other locations) and then using the access code 416063. 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, 2022, Hilltop employed approximately 4,650 people and operated approximately 385 locations in 47 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,” “probable,” “progressing,” “projects,” “seeks,” “should,” “target,” “view,” “well-tuned,” “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; (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) the COVID-19 pandemic and the response of governmental authorities to the pandemic and disruptions in global or national supply chains, which have had, and may continue to have, an adverse impact on the global economy and our business operations and performance; (vi) transitions away from the London Interbank Offered Rate; and (vii) risks associated with concentration in real estate related loans. 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.

Contacts

Investor Relations Contact:
Erik Yohe
214-525-4634
eyohe@hilltop-holdings.com

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