Business Wire | Jan 27, 2022 04:45PM EST

Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2021

Jan. 27, 2022

DALLAS--(BUSINESS WIRE)--Jan. 27, 2022--Hilltop Holdings Inc. (NYSE: HTH) ("Hilltop") today announced financial results for the fourth quarter and full year 2021. Hilltop produced income from continuing operations to common stockholders of $62.2 million, or $0.78 per diluted share, for the fourth quarter of 2021, compared to $112.7 million, or $1.30 per diluted share, for the fourth quarter of 2020. Income from continuing operations to common stockholders for the full year 2021 was $374.5 million, or $4.61 per diluted share, compared to $409.4 million, or $4.58 per diluted share, for the full year 2020. Hilltop's financial results from continuing operations for the fourth quarter and full year 2021 included decreases in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income as well as declines in net revenues within the broker-dealer segment's structured finance business and fixed income services lines, partially offset by improvements in the macroeconomic outlook and resulting beneficial impact on loan expected loss rates within the banking segment.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per common share, a 25% increase from the prior quarter, payable on February 28, 2022, to all common stockholders of record as of the close of business on February 15, 2022. Additionally, during 2021, Hilltop paid $123.6 million to repurchase approximately 3.63 million shares of its common stock at an average price of $34.01 per share pursuant to the 2021 stock repurchase program. These shares were returned to the pool of authorized but unissued shares of common stock. The Hilltop Board of Directors authorized a new stock repurchase program through January 2023, under which Hilltop may repurchase, in the aggregate, up to $100.0 million of its outstanding common stock.

The COVID-19 pandemic has adversely impacted financial markets and overall economic conditions, and is expected to continue to have implications on our business and operations. The extent of the impact of the pandemic on our operational and financial performance for 2022 is currently uncertain and will depend on certain developments outside of our control, including, among others, the ongoing distribution and effectiveness of vaccines, the emergence of new variants of the virus, government stimulus, the ultimate impact of the pandemic on our customers and clients, and additional, or extended, federal, state and local government orders and regulations that might be imposed in response to the pandemic.

Jeremy B. Ford, President and CEO of Hilltop, said, "I am pleased to announce Hilltop's 2021 strong performance that represents a second consecutive year of outstanding results. Once again, Hilltop generated consolidated annual pre-tax income above $500 million, return on average assets above 2%, return on average equity above 15% and growth in book value per share above 12%. This exceptional financial performance was primarily the result of strong execution by our talented employees, prudent leadership from our experienced management teams, and a commitment to serve our customers and the communities in which they live. PlainsCapital Bank realized further improvement in the quality of its loan portfolio, while expanding business sourcing efforts and the recruitment of talented lending teams. PrimeLending once again originated nearly $23 billion in mortgages, which is a reflection of a well-tuned platform. For the year, Hilltop Securities produced net revenue of $424 million. While the fourth quarter was challenging, Hilltop Securities has an improved infrastructure and a talented team to drive towards a successful 2022."

Fourth Quarter 2021 Highlights for Hilltop:

* The reversal of credit losses was $18.6 million during the fourth quarter of 2021, compared to a reversal of credit losses of $5.8 million in the third quarter of 2021; The reversal of credit losses during the fourth quarter of 2021 primarily reflected improvements in both macroeconomic forecast assumptions and credit quality metrics. * For the fourth quarter of 2021, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $192.0 million, compared to $297.6 million in the fourth quarter of 2020, a 35.5% decrease; Mortgage loan origination production volume was $5.0 billion during the fourth quarter of 2021, compared to $6.8 billion in the fourth quarter of 2020; Net gains from mortgage loans sold to third parties increased to 362 basis points during the fourth quarter of 2021, compared to 359 basis points in the third quarter of 2021. * Hilltop's consolidated annualized return on average assets and return on average equity for the fourth quarter of 2021 were 1.41% and 9.93%, respectively, compared to 2.83% and 20.56%, respectively, for the fourth quarter of 2020; * Hilltop's book value per common share increased to $31.95 at December 31, 2021, compared to $31.36 at September 30, 2021; * Hilltop's total assets were $18.7 billion and $18.0 billion at December 31, 2021 and September 30, 2021, respectively; * Loans1, net of allowance for credit losses, increased to $7.1 billion at December 31, 2021 compared to $6.8 billion at September 30, 2021; Includes supporting our impacted banking clients through funding of over 4,100 loans through both the initial and second rounds of the Paycheck Protection Program, or PPP, with a remaining balance of approximately $78 million as of December 31, 2021, compared to approximately $133 million as of September 30, 2021; Through January 21, 2022, the Small Business Administration, or SBA, had approved approximately 3,600 PPP forgiveness applications from the Bank totaling approximately $833 million, with PPP loans of approximately $7 million currently pending SBA review and approval. * Non-performing loans were $51.1 million, or 0.52% of total loans, at December 31, 2021, compared to $62.2 million, or 0.64% of total loans, at September 30, 2021; * We further supported our impacted banking clients during 2020 through the approval of COVID-19 related loan modifications of approximately $1.0 billion, and continued such support during 2021, resulting in a portfolio of active deferrals that have not reached the end of their deferral period of approximately $4 million as of December 31, 2021, compared to approximately $17 million in active deferment as of September 30, 2021; While the majority of the portfolio of COVID-19 related loan modifications no longer require deferral, such loans may continue to represent elevated risk; therefore, monitoring of these loans continues. * Loans held for sale decreased by 10.9% from September 30, 2021 to $1.9 billion at December 31, 2021; * Total deposits were $12.8 billion and $12.1 billion at December 31, 2021 and September 30, 2021, respectively; * Hilltop maintained strong capital levels2 with a Tier 1 Leverage Ratio3 of 12.58% and a Common Equity Tier 1 Capital Ratio of 21.22% at December 31, 2021; * Hilltop's consolidated net interest margin4 decreased to 2.44% for the fourth quarter of 2021, compared to 2.53% in the third quarter of 2021; Includes previously deferred interest income of $2.2 million during the fourth quarter of 2021, compared to $4.6 million during the third quarter of 2021, related to PPP loan-related origination fees.

* For the fourth quarter of 2021, noninterest income from continuing operations was $284.8 million, compared to $447.9 million in the fourth quarter of 2020, a 36.4% decrease; * For the fourth quarter 2021, noninterest expense from continuing operations was $322.2 million, compared to $402.3 million in the fourth quarter of 2020, a 19.9% decrease; and * Hilltop's effective tax rate from continuing operations was 24.2% during the fourth quarter of 2021, compared to 25.1% during the same period in 2020.

Discontinued Operations

On June 30, 2020, Hilltop completed the sale of National Lloyds Corporation, or NLC, which comprised the operations of its former insurance segment, for cash proceeds of $154.1 million. During 2020, Hilltop recognized an aggregate gain associated with this transaction of $36.8 million, net of transaction costs. Accordingly, insurance segment results and its assets and liabilities have been presented as discontinued operations. The resulting book gain from this sale transaction was not recognized for tax purposes pursuant to the rules promulgated under the Internal Revenue Code.

__________________________

Note: "Consolidated" refers to our consolidated financial position andconsolidated results of operations, including discontinued operations andassets and liabilities of discontinued operations.^ "Loans" reflect loans held for investment excluding broker-dealer margin1 loans, net of allowance for credit losses, of $733.0 million and $645.6 million at December 31, 2021 and September 30, 2021, respectively.

Capital ratios reflect Hilltop's decision to elect the transition option as^ issued by the federal banking regulatory agencies in March 2020 that permits2 banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period.

^ Based on the end of period Tier 1 capital divided by total average assets3 during the quarter, excluding goodwill and intangible assets.

^ Net interest margin is defined as net interest income divided by average4 interest-earning assets.

Consolidated Financial and Other Information

Consolidated Balance Sheets

December 31,

September 30,

June 30,

March 31,

December 31,

(in 000's)

2021

2021

2021

2021

2020

Cash and due from banks

$

2,823,138

$

2,463,111

$

1,372,818

$

1,564,489

$

1,062,560

Federal funds sold

385

406

387

396

386

Assets segregated for regulatory purposes

221,740

269,506

207,284

273,393

290,357

Securities purchased under agreements to resell

118,262

155,908

202,638

106,342

80,319

Securities:

Trading, at fair value

647,998

609,813

682,483

528,712

694,255

Available for sale, at fair value, net

2,130,568

1,994,183

1,817,807

1,715,406

1,462,205

Held to maturity, at amortized cost, net

267,684

277,419

288,776

300,088

311,944

Equity, at fair value

250

221

193

189

140

3,046,500

2,881,636

2,789,259

2,544,395

2,468,544

Loans held for sale

1,878,190

2,108,878

2,885,458

2,538,986

2,788,386

Loans held for investment, net of unearned income

7,879,904

7,552,926

7,645,227

7,810,657

7,693,141

Allowance for credit losses

(91,352

)

(109,512

)

(115,269

)

(144,499

)

(149,044

)

Loans held for investment, net

7,788,552

7,443,414

7,529,958

7,666,158

7,544,097

Broker-dealer and clearing organization receivables

1,672,946

1,419,652

1,403,447

1,596,817

1,404,727

Premises and equipment, net

204,438

210,026

212,402

213,304

211,595

Operating lease right-of-use assets

112,328

115,942

115,698

101,055

105,757

Mortgage servicing assets

86,990

110,931

124,497

142,125

143,742

Other assets

452,880

526,339

535,536

648,895

555,983

Goodwill

267,447

267,447

267,447

267,447

267,447

Other intangible assets, net

15,284

16,455

17,705

19,035

20,364

Total assets

$

18,689,080

$

17,989,651

$

17,664,534

$

17,682,837

$

16,944,264

Deposits:

Noninterest-bearing

$

4,577,183

$

4,433,148

$

4,231,082

$

4,031,181

$

3,612,384

Interest-bearing

8,240,894

7,699,014

7,502,703

7,701,598

7,629,935

Total deposits

12,818,077

12,132,162

11,733,785

11,732,779

11,242,319

Broker-dealer and clearing organization payables

1,477,300

1,496,923

1,439,620

1,546,227

1,368,373

Short-term borrowings

859,444

747,040

915,919

676,652

695,798

Securities sold, not yet purchased, at fair value

96,586

113,064

132,950

97,055

79,789

Notes payable

387,904

395,804

396,653

401,713

381,987

Operating lease liabilities

130,960

134,296

134,019

120,339

125,450

Junior subordinated debentures

-

-

67,012

67,012

67,012

Other liabilities

369,606

468,020

348,200

595,045

632,889

Total liabilities

16,139,877

15,487,309

15,168,158

15,236,822

14,593,617

Common stock

790

790

812

823

822

Additional paid-in capital

1,274,446

1,270,272

1,302,439

1,319,518

1,317,929

Accumulated other comprehensive income (loss)

(10,219

)

367

7,093

3,486

17,763

Retained earnings

1,257,014

1,204,307

1,159,304

1,094,727

986,792

Deferred compensation employee stock trust, net

752

751

754

752

771

Employee stock trust

(115

)

(116

)

(121

)

(121

)

(138

)

Total Hilltop stockholders' equity

2,522,668

2,476,371

2,470,281

2,419,185

2,323,939

Noncontrolling interests

26,535

25,971

26,095

26,830

26,708

Total stockholders' equity

2,549,203

2,502,342

2,496,376

2,446,015

2,350,647

Total liabilities & stockholders' equity

$

18,689,080

$

17,989,651

$

17,664,534

$

17,682,837

$

16,944,264

Consolidated Financial and Other Information



Consolidated December 31, September 30, June 30, March 31, December 31,Balance Sheets

(in 000's) 2021 2021 2021 2021 2020

Cash and due from $ 2,823,138 $ 2,463,111 $ 1,372,818 $ 1,564,489 $ 1,062,560 banks

Federal funds sold 385 406 387 396 386

Assets segregatedfor regulatory 221,740 269,506 207,284 273,393 290,357 purposes

Securitiespurchased under 118,262 155,908 202,638 106,342 80,319 agreements toresell

Securities:

Trading, at fair 647,998 609,813 682,483 528,712 694,255 value

Available for sale, 2,130,568 1,994,183 1,817,807 1,715,406 1,462,205 at fair value, net

Held to maturity,at amortized cost, 267,684 277,419 288,776 300,088 311,944 net

Equity, at fair 250 221 193 189 140 value

3,046,500 2,881,636 2,789,259 2,544,395 2,468,544

Loans held for sale 1,878,190 2,108,878 2,885,458 2,538,986 2,788,386

Loans held forinvestment, net of 7,879,904 7,552,926 7,645,227 7,810,657 7,693,141 unearned income

Allowance for (91,352 ) (109,512 ) (115,269 ) (144,499 ) (149,044 )credit losses

Loans held for 7,788,552 7,443,414 7,529,958 7,666,158 7,544,097 investment, net



Broker-dealer andclearing 1,672,946 1,419,652 1,403,447 1,596,817 1,404,727 organizationreceivables

Premises and 204,438 210,026 212,402 213,304 211,595 equipment, net

Operating lease 112,328 115,942 115,698 101,055 105,757 right-of-use assets

Mortgage servicing 86,990 110,931 124,497 142,125 143,742 assets

Other assets 452,880 526,339 535,536 648,895 555,983

Goodwill 267,447 267,447 267,447 267,447 267,447

Other intangible 15,284 16,455 17,705 19,035 20,364 assets, net

Total assets $ 18,689,080 $ 17,989,651 $ 17,664,534 $ 17,682,837 $ 16,944,264



Deposits:

Noninterest-bearing $ 4,577,183 $ 4,433,148 $ 4,231,082 $ 4,031,181 $ 3,612,384

Interest-bearing 8,240,894 7,699,014 7,502,703 7,701,598 7,629,935

Total deposits 12,818,077 12,132,162 11,733,785 11,732,779 11,242,319

Broker-dealer andclearing 1,477,300 1,496,923 1,439,620 1,546,227 1,368,373 organizationpayables

Short-term 859,444 747,040 915,919 676,652 695,798 borrowings

Securities sold,not yet purchased, 96,586 113,064 132,950 97,055 79,789 at fair value

Notes payable 387,904 395,804 396,653 401,713 381,987

Operating lease 130,960 134,296 134,019 120,339 125,450 liabilities

Junior subordinated - - 67,012 67,012 67,012 debentures

Other liabilities 369,606 468,020 348,200 595,045 632,889

Total liabilities 16,139,877 15,487,309 15,168,158 15,236,822 14,593,617



Common stock 790 790 812 823 822

Additional paid-in 1,274,446 1,270,272 1,302,439 1,319,518 1,317,929 capital

Accumulated othercomprehensive (10,219 ) 367 7,093 3,486 17,763 income (loss)

Retained earnings 1,257,014 1,204,307 1,159,304 1,094,727 986,792

Deferredcompensation 752 751 754 752 771 employee stocktrust, net

Employee stock (115 ) (116 ) (121 ) (121 ) (138 )trust

Total Hilltopstockholders' 2,522,668 2,476,371 2,470,281 2,419,185 2,323,939 equity

Noncontrolling 26,535 25,971 26,095 26,830 26,708 interests

Total stockholders' 2,549,203 2,502,342 2,496,376 2,446,015 2,350,647 equity

Total liabilities &stockholders' $ 18,689,080 $ 17,989,651 $ 17,664,534 $ 17,682,837 $ 16,944,264 equity

Three Months Ended

Year Ended

Consolidated Income Statements

December 31,

September 30,

December 31,

December 31,

December 31,

(in 000's, except per share data)

2021

2021

2020

2021

2020

Interest income:

Loans, including fees

$

96,104

$

99,769

$

109,328

$

404,312

$

433,311

Securities borrowed

8,524

8,585

14,445

61,667

51,360

Securities:

Taxable

13,916

12,341

9,845

47,633

48,273

Tax-exempt

2,639

2,687

1,862

9,766

6,698

Other

1,872

1,796

1,381

6,595

6,853

Total interest income

123,055

125,178

136,861

529,973

546,495

Interest expense:

Deposits

4,404

5,303

9,269

23,624

47,040

Securities loaned

6,624

6,519

12,014

50,974

42,816

Short-term borrowings

2,279

2,400

2,154

9,065

11,611

Notes payable

5,871

5,465

4,807

21,386

15,897

Junior subordinated debentures

-

419

609

1,558

2,772

Other

(417

)

(18

)

636

384

2,193

Total interest expense

18,761

20,088

29,489

106,991

122,329

Net interest income

104,294

105,090

107,372

422,982

424,166

Provision for (reversal of) credit losses

(18,565

)

(5,819

)

(3,482

)

(58,213

)

96,491

Net interest income after provision for (reversal of) credit losses

122,859

110,909

110,854

481,195

327,675

Noninterest income:

Net gains from sale of loans and other mortgage production income

156,103

203,152

247,360

825,960

1,001,059

Mortgage loan origination fees

35,930

38,780

50,193

160,011

171,769

Securities commissions and fees

32,801

34,412

35,921

143,827

142,720

Investment and securities advisory fees and commissions

42,834

49,646

42,161

152,443

131,327

Other

17,178

41,955

72,296

128,034

243,605

Total noninterest income

284,846

367,945

447,931

1,410,275

1,690,480

Noninterest expense:

Employees' compensation and benefits

229,717

258,679

291,489

1,007,235

1,059,645

Occupancy and equipment, net

25,741

25,428

27,596

100,602

99,416

Professional services

9,904

14,542

21,927

54,270

69,984

Other

56,832

56,525

61,336

225,291

224,758

Total noninterest expense

322,194

355,174

402,348

1,387,398

1,453,803

Income from continuing operations before income taxes

85,511

123,680

156,437

504,072

564,352

Income tax expense

20,715

28,257

39,295

117,976

133,071

Income from continuing operations

64,796

95,423

117,142

386,096

431,281

Income from discontinued operations, net of income taxes

-

-

3,734

-

38,396

Net income

64,796

95,423

120,876

386,096

469,677

Less: Net income attributable to noncontrolling interest

2,611

2,517

4,431

11,601

21,841

Income attributable to Hilltop

$

62,185

$

92,906

$

116,445

$

374,495

$

447,836

Earnings per common share:

Basic:

Earnings from continuing operations

$

0.79

$

1.16

$

1.31

$

4.64

$

4.59

Earnings from discontinued operations

-

-

0.04

-

0.43

$

0.79

$

1.16

$

1.35

$

4.64

$

5.02

Diluted:

Earnings from continuing operations

$

0.78

$

1.15

$

1.30

$

4.61

$

4.58

Earnings from discontinued operations

-

-

0.05

-

0.43

$

0.78

$

1.15

$

1.35

$

4.61

$

5.01

Cash dividends declared per common share

$

0.12

$

0.12

$

0.09

$

0.48

$

0.36

Weighted average shares outstanding:

Basic

78,933

80,109

86,269

80,708

89,280

Diluted

79,427

80,542

86,420

81,173

89,304



Three Months Ended Year Ended

Consolidated December September December DecemberIncome 31, 30, 31, December 31, 31,Statements

(in 000's,except per 2021 2021 2020 2021 2020share data)

Interest income:

Loans, $ 96,104 $ 99,769 $ 109,328 $ 404,312 $ 433,311including fees

Securities 8,524 8,585 14,445 61,667 51,360borrowed

Securities:

Taxable 13,916 12,341 9,845 47,633 48,273

Tax-exempt 2,639 2,687 1,862 9,766 6,698

Other 1,872 1,796 1,381 6,595 6,853

Total interest 123,055 125,178 136,861 529,973 546,495income



Interest expense:

Deposits 4,404 5,303 9,269 23,624 47,040

Securities 6,624 6,519 12,014 50,974 42,816loaned

Short-term 2,279 2,400 2,154 9,065 11,611borrowings

Notes payable 5,871 5,465 4,807 21,386 15,897

Juniorsubordinated - 419 609 1,558 2,772debentures

Other (417 ) (18 ) 636 384 2,193

Total interest 18,761 20,088 29,489 106,991 122,329expense



Net interest 104,294 105,090 107,372 422,982 424,166income

Provision for(reversal of) (18,565 ) (5,819 ) (3,482 ) (58,213 ) 96,491credit losses

Net interestincome afterprovision for 122,859 110,909 110,854 481,195 327,675(reversal of)credit losses



Noninterest income:

Net gains fromsale of loansand other 156,103 203,152 247,360 825,960 1,001,059mortgageproductionincome

Mortgage loanorigination 35,930 38,780 50,193 160,011 171,769fees

Securitiescommissions 32,801 34,412 35,921 143,827 142,720and fees

Investment andsecuritiesadvisory fees 42,834 49,646 42,161 152,443 131,327andcommissions

Other 17,178 41,955 72,296 128,034 243,605

Totalnoninterest 284,846 367,945 447,931 1,410,275 1,690,480income



Noninterest expense:

Employees'compensation 229,717 258,679 291,489 1,007,235 1,059,645and benefits

Occupancy and 25,741 25,428 27,596 100,602 99,416equipment, net

Professional 9,904 14,542 21,927 54,270 69,984services

Other 56,832 56,525 61,336 225,291 224,758

Totalnoninterest 322,194 355,174 402,348 1,387,398 1,453,803expense



Income fromcontinuingoperations 85,511 123,680 156,437 504,072 564,352before incometaxes

Income tax 20,715 28,257 39,295 117,976 133,071expense

Income fromcontinuing 64,796 95,423 117,142 386,096 431,281operations

Income fromdiscontinuedoperations, - - 3,734 - 38,396net of incometaxes

Net income 64,796 95,423 120,876 386,096 469,677

Less: Netincomeattributable 2,611 2,517 4,431 11,601 21,841tononcontrollinginterest

Incomeattributable $ 62,185 $ 92,906 $ 116,445 $ 374,495 $ 447,836to Hilltop



Earnings per common share:

Basic:

Earnings fromcontinuing $ 0.79 $ 1.16 $ 1.31 $ 4.64 $ 4.59operations

Earnings fromdiscontinued - - 0.04 - 0.43operations

$ 0.79 $ 1.16 $ 1.35 $ 4.64 $ 5.02

Diluted:

Earnings fromcontinuing $ 0.78 $ 1.15 $ 1.30 $ 4.61 $ 4.58operations

Earnings fromdiscontinued - - 0.05 - 0.43operations

$ 0.78 $ 1.15 $ 1.35 $ 4.61 $ 5.01



Cash dividendsdeclared per $ 0.12 $ 0.12 $ 0.09 $ 0.48 $ 0.36common share



Weightedaverage shares outstanding:

Basic 78,933 80,109 86,269 80,708 89,280

Diluted 79,427 80,542 86,420 81,173 89,304

Three Months Ended December 31, 2021

Segment Results

Mortgage

All Other and

Continuing

(in 000's)

Banking

Broker-Dealer

Origination

Corporate

Eliminations

Operations

Net interest income (expense)

$

97,194

$

11,673

$

(3,846

)

$

(3,519

)

$

2,792

$

104,294

Provision for (reversal of) credit losses

(18,450

)

(115

)

-

-

-

(18,565

)

Noninterest income

11,820

82,896

192,311

993

(3,174

)

284,846

Noninterest expense

59,046

92,967

157,172

13,492

(483

)

322,194

Income (loss) from continuing operations before taxes

$

68,418

$

1,717

$

31,293

$

(16,018

)

$

101

$

85,511



Three Months Ended December 31, 2021

Segment Mortgage All Other ContinuingResults and

(in 000's) Banking Broker-Dealer Origination Corporate Eliminations Operations

Netinterest $ 97,194 $ 11,673 $ (3,846 ) $ (3,519 ) $ 2,792 $ 104,294 income(expense)

Provisionfor(reversal (18,450 ) (115 ) - - - (18,565 )of) creditlosses

Noninterest 11,820 82,896 192,311 993 (3,174 ) 284,846 income

Noninterest 59,046 92,967 157,172 13,492 (483 ) 322,194 expense

Income(loss) fromcontinuing $ 68,418 $ 1,717 $ 31,293 $ (16,018 ) $ 101 $ 85,511 operationsbeforetaxes

Year Ended December 31, 2021

Segment Results

Mortgage

All Other and

Continuing

(in 000's)

Banking

Broker-Dealer

Origination

Corporate

Eliminations

Operations

Net interest income (expense)

$

406,524

$

43,296

$

(20,400

)

$

(17,239

)

$

10,801

$

422,982

Provision for (reversal of) credit losses

(58,175

)

(38

)

-

-

-

(58,213

)

Noninterest income

45,113

381,125

986,990

9,133

(12,086

)

1,410,275

Noninterest expense

226,915

380,798

731,056

50,507

(1,878

)

1,387,398

Income (loss) from continuing operations before taxes

$

282,897

$

43,661

$

235,534

$

(58,613

)

$

593

$

504,072



Year Ended December 31, 2021

Segment Mortgage All Other and ContinuingResults

(in 000's) Banking Broker-Dealer Origination Corporate Eliminations Operations

Netinterest $ 406,524 $ 43,296 $ (20,400 ) $ (17,239 ) $ 10,801 $ 422,982 income(expense)

Provisionfor(reversal (58,175 ) (38 ) - - - (58,213 )of) creditlosses

Noninterest 45,113 381,125 986,990 9,133 (12,086 ) 1,410,275 income

Noninterest 226,915 380,798 731,056 50,507 (1,878 ) 1,387,398 expense

Income(loss) fromcontinuing $ 282,897 $ 43,661 $ 235,534 $ (58,613 ) $ 593 $ 504,072 operationsbeforetaxes

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

Selected Financial Data

2021

2021

2020

2021

2020

Hilltop Consolidated (1):

Return on average stockholders' equity

9.93

%

14.96

%

20.56

%

15.38

%

20.03

%

Return on average assets

1.41

%

2.13

%

2.83

%

2.17

%

2.88

%

Net interest margin (2)

2.44

%

2.53

%

2.71

%

2.57

%

2.85

%

Net interest margin (taxable equivalent) (3):

As reported

2.45

%

2.54

%

2.72

%

2.58

%

2.85

%

Impact of purchase accounting

12 bps

9 bps

15 bps

12 bps

14 bps

Book value per common share ($)

31.95

31.36

28.28

31.95

28.28

Shares outstanding, end of period (000's)

78,965

78,959

82,185

78,965

82,185

Dividend payout ratio (4)

15.19

%

10.34

%

6.67

%

10.34

%

7.18

%

Banking Segment:

Net interest margin (2)

2.81

%

2.99

%

3.37

%

3.07

%

3.31

%

Net interest margin (taxable equivalent) (3):

As reported

2.82

%

3.00

%

3.38

%

3.08

%

3.31

%

Impact of purchase accounting

15 bps

11 bps

20 bps

16 bps

18 bps

Accretion of discount on loans ($000's)

4,716

3,221

5,629

18,789

18,831

Net recoveries (charge-offs) ($000's)

405

62

(2,688

)

521

(21,145

)

Return on average assets

1.44

%

1.36

%

1.37

%

1.55

%

0.63

%

Fee income ratio

10.8

%

10.5

%

10.2

%

10.0

%

9.6

%

Efficiency ratio

54.2

%

48.8

%

53.0

%

50.3

%

53.8

%

Employees' compensation and benefits ($000's)

34,415

31,500

34,007

130,276

127,985

Broker-Dealer Segment:

Net revenue ($000's) (5)

94,569

126,570

150,070

424,421

531,267

Employees' compensation and benefits ($000's) (6)

65,301

82,429

87,621

276,176

312,396

Variable compensation expense ($000's)

35,939

53,505

60,295

161,264

205,464

Compensation as a % of net revenue (6)

69.1

%

65.1

%

58.4

%

65.1

%

58.8

%

Pre-tax margin (7)

1.8

%

13.8

%

22.8

%

10.3

%

21.8

%

Mortgage Origination Segment:

Mortgage loan originations - volume ($000's):

Home purchases

3,559,137

3,948,420

3,683,564

14,429,190

13,413,545

Refinancings

1,430,369

1,646,208

3,114,630

8,239,093

9,556,649

Total mortgage loan originations - volume

4,989,506

5,594,628

6,798,194

22,668,283

22,970,194

Mortgage loan sales - volume ($000's)

4,988,538

6,195,559

6,571,234

23,059,160

22,514,170

Net gains from mortgage loan sales (basis points):

Loans sold to third parties

362

359

451

375

409

Impact of loans retained by banking segment

(15

)

(13

)

(3

)

(13

)

(3

)

As reported

347

346

448

362

406

Mortgage servicing rights asset ($000's) (8)

86,990

110,931

143,742

86,990

143,742

Employees' compensation and benefits ($000's)

121,758

134,814

163,822

568,221

586,713

Variable compensation expense ($000's)

73,208

88,153

116,736

373,929

405,116



Three Months Ended Year Ended

December 31, September 30, December 31, December 31, December 31,

SelectedFinancial 2021 2021 2020 2021 2020Data



HilltopConsolidated ^(1):

Return onaverage 9.93 % 14.96 % 20.56 % 15.38 % 20.03 %stockholders'equity

Return onaverage 1.41 % 2.13 % 2.83 % 2.17 % 2.88 %assets

Net interest 2.44 % 2.53 % 2.71 % 2.57 % 2.85 %margin ^(2)

Net interestmargin(taxable equivalent) ^(3):

As reported 2.45 % 2.54 % 2.72 % 2.58 % 2.85 %

Impact ofpurchase 12 bps 9 bps 15 bps 12 bps 14 bps accounting

Book valueper common 31.95 31.36 28.28 31.95 28.28 share ($)

Sharesoutstanding, 78,965 78,959 82,185 78,965 82,185 end of period(000's)

Dividendpayout ratio 15.19 % 10.34 % 6.67 % 10.34 % 7.18 %^(4)



Banking Segment:

Net interest 2.81 % 2.99 % 3.37 % 3.07 % 3.31 %margin ^(2)

Net interestmargin(taxable equivalent)^(3):

As reported 2.82 % 3.00 % 3.38 % 3.08 % 3.31 %

Impact ofpurchase 15 bps 11 bps 20 bps 16 bps 18 bps accounting

Accretion ofdiscount on 4,716 3,221 5,629 18,789 18,831 loans($000's)

Netrecoveries 405 62 (2,688 ) 521 (21,145 )(charge-offs)($000's)

Return onaverage 1.44 % 1.36 % 1.37 % 1.55 % 0.63 %assets

Fee income 10.8 % 10.5 % 10.2 % 10.0 % 9.6 %ratio

Efficiency 54.2 % 48.8 % 53.0 % 50.3 % 53.8 %ratio

Employees'compensation 34,415 31,500 34,007 130,276 127,985 and benefits($000's)



Broker-Dealer Segment:

Net revenue 94,569 126,570 150,070 424,421 531,267 ($000's) ^(5)

Employees'compensation 65,301 82,429 87,621 276,176 312,396 and benefits($000's) ^(6)

Variablecompensation 35,939 53,505 60,295 161,264 205,464 expense($000's)

Compensationas a % of net 69.1 % 65.1 % 58.4 % 65.1 % 58.8 %revenue ^(6)

Pre-tax 1.8 % 13.8 % 22.8 % 10.3 % 21.8 %margin ^(7)



MortgageOrigination Segment:

Mortgage loanoriginations - volume ($000's):

Home 3,559,137 3,948,420 3,683,564 14,429,190 13,413,545 purchases

Refinancings 1,430,369 1,646,208 3,114,630 8,239,093 9,556,649

Totalmortgage loan 4,989,506 5,594,628 6,798,194 22,668,283 22,970,194 originations- volume

Mortgage loansales - 4,988,538 6,195,559 6,571,234 23,059,160 22,514,170 volume($000's)

Net gainsfrom mortgageloan sales (basispoints):

Loans sold to 362 359 451 375 409 third parties

Impact ofloansretained by (15 ) (13 ) (3 ) (13 ) (3 )bankingsegment

As reported 347 346 448 362 406

Mortgageservicing 86,990 110,931 143,742 86,990 143,742 rights asset($000's) ^(8)

Employees'compensation 121,758 134,814 163,822 568,221 586,713 and benefits($000's)

Variablecompensation 73,208 88,153 116,736 373,929 405,116expense($000's)

__________________________

(1)

Ratios and financial data presented on a consolidated basis. For all 2020 periods presented, information includes discontinued operations.

(2)

Net interest margin is defined as net interest income divided by average interest-earning assets.

(3)

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 $0.5 million, $0.6 million, $0.4 million, $0.2 million, and $0.3 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.2 million, $0.2 million, and $0.2 million, respectively, for the periods presented.

(4)

Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share.

(5)

Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income.

(6)

Noted balances and ratios during all prior periods reflect certain reclassifications to conform to current period presentation.

(7)

Pre-tax margin is defined as income before income taxes divided by net revenue.

(8)

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.

__________________________

(1) Ratios and financial data presented on a consolidated basis. For all 2020 periods presented, information includes discontinued operations.

(2) Net interest margin is defined as net interest income divided by average interest-earning assets.

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(3) 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 $0.5 million, $0.6 million, $0.4 million, $0.2 million, and $0.3 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.2 million, $0.2 million, and $0.2 million, respectively, for the periods presented.

(4) Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share.

(5) Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income.

(6) Noted balances and ratios during all prior periods reflect certain reclassifications to conform to current period presentation.

(7) Pre-tax margin is defined as income before income taxes divided by net revenue.

Reported on a consolidated basis and therefore does not include mortgage(8) servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation.

December 31,

September 30,

June 30,

March 31,

December 31,

Capital Ratios

2021

2021

2021

2021

2020

Tier 1 capital (to average assets):

PlainsCapital

10.20

%

10.02

%

10.22

%

10.50

%

10.44

%

Hilltop

12.58

%

12.64

%

12.87

%

13.01

%

12.64

%

Common equity Tier 1 capital (to risk-weighted assets):

PlainsCapital

16.00

%

15.40

%

15.00

%

14.74

%

14.40

%

Hilltop

21.22

%

21.28

%

20.22

%

19.63

%

18.97

%

Tier 1 capital (to risk-weighted assets):

PlainsCapital

16.00

%

15.40

%

15.00

%

14.74

%

14.40

%

Hilltop

21.22

%

21.28

%

20.82

%

20.22

%

19.57

%

Total capital (to risk-weighted assets):

PlainsCapital

16.77

%

16.32

%

15.95

%

15.64

%

15.27

%

Hilltop

23.75

%

24.00

%

23.48

%

22.96

%

22.34

%



December September June 30, March 31, December 31, 30, 31,

Capital Ratios 2021 2021 2021 2021 2020

Tier 1 capital (to average assets):

PlainsCapital 10.20 % 10.02 % 10.22 % 10.50 % 10.44 %

Hilltop 12.58 % 12.64 % 12.87 % 13.01 % 12.64 %

Common equity Tier1 capital (to risk-weightedassets):

PlainsCapital 16.00 % 15.40 % 15.00 % 14.74 % 14.40 %

Hilltop 21.22 % 21.28 % 20.22 % 19.63 % 18.97 %

Tier 1 capital (torisk-weighted assets):

PlainsCapital 16.00 % 15.40 % 15.00 % 14.74 % 14.40 %

Hilltop 21.22 % 21.28 % 20.82 % 20.22 % 19.57 %

Total capital (torisk-weighted assets):

PlainsCapital 16.77 % 16.32 % 15.95 % 15.64 % 15.27 %

Hilltop 23.75 % 24.00 % 23.48 % 22.96 % 22.34 %

December 31,

September 30,

June 30,

March 31,

December 31,

Non-Performing Assets Portfolio Data

2021

2021

2021

2021

2020

Loans accounted for on a non-accrual basis ($000's) (1):

Commercial real estate

6,601

5,705

7,211

10,668

11,133

Commercial and industrial

22,478

29,808

33,033

36,144

34,049

Construction and land development

2

366

474

501

507

1-4 family residential

21,123

25,255

27,100

30,937

32,263

Consumer

23

24

26

26

28

Broker-dealer

-

-

-

-

-

50,227

61,158

67,844

78,276

77,980

Troubled debt restructurings included in accruing loans held for investment ($000's)

922

1,038

1,139

1,584

1,954

Non-performing loans ($000's)

51,149

62,196

68,983

79,860

79,934

Non-performing loans as a % of total loans

0.52

%

0.64

%

0.66

%

0.77

%

0.76

%

Other real estate owned ($000's)

2,833

21,605

21,078

19,899

21,289

Other repossessed assets ($000's)

-

-

-

-

101

Non-performing assets ($000's)

53,982

83,801

90,061

99,759

101,324

Non-performing assets as a % of total assets

0.29

%

0.47

%

0.51

%

0.56

%

0.60

%

Loans past due 90 days or more and still accruing ($000's) (2):

60,775

175,734

245,828

265,230

243,630



December September June 30, March 31, December 31, 30, 31,

Non-PerformingAssets 2021 2021 2021 2021 2020Portfolio Data

Loansaccounted foron a non-accrualbasis ($000's)^(1):

Commercial 6,601 5,705 7,211 10,668 11,133 real estate

Commercial and 22,478 29,808 33,033 36,144 34,049 industrial

Constructionand land 2 366 474 501 507 development

1-4 family 21,123 25,255 27,100 30,937 32,263 residential

Consumer 23 24 26 26 28

Broker-dealer - - - - -

50,227 61,158 67,844 78,276 77,980

Troubled debtrestructuringsincluded inaccruing loans 922 1,038 1,139 1,584 1,954 held forinvestment($000's)

Non-performing 51,149 62,196 68,983 79,860 79,934 loans ($000's)



Non-performingloans as a % 0.52 % 0.64 % 0.66 % 0.77 % 0.76 %of total loans



Other realestate owned 2,833 21,605 21,078 19,899 21,289 ($000's)



Otherrepossessed - - - - 101 assets($000's)



Non-performingassets 53,982 83,801 90,061 99,759 101,324 ($000's)



Non-performingassets as a % 0.29 % 0.47 % 0.51 % 0.56 % 0.60 %of totalassets



Loans past due90 days ormore and still 60,775 175,734 245,828 265,230 243,630 accruing($000's) ^(2):

__________________________

(1)

Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications. The Bank's COVID-19 payment deferral programs allow 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. Since the second quarter of 2020, the Bank's actions included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $4 million as of December 31, 2021, down from approximately $17 million as of September 30, 2021.

(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.

__________________________

Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications. The Bank's COVID-19 payment deferral programs allow for a deferral of principal and/or interest payments with such deferred(1) principal payments due and payable on the maturity date of the existing loan. Since the second quarter of 2020, the Bank's actions included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $4 million as of December 31, 2021, down from approximately $17 million as of September 30, 2021.

Loans past due 90 days or more and still accruing were primarily comprised(2) 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 December 31,

2021

2020

Average

Interest

Annualized

Average

Interest

Annualized

Outstanding

Earned or

Yield or

Outstanding

Earned or

Yield or

Net Interest Margin (Taxable Equivalent) Details (1)

Balance

Paid

Rate

Balance

Paid

Rate

Assets

Interest-earning assets

Loans held for sale

$

1,852,140

$

13,708

2.96

%

$

2,760,798

$

18,692

2.71

%

Loans held for investment, gross (2)

7,695,090

82,396

4.25

%

7,732,754

90,636

4.62

%

Investment securities - taxable

2,677,894

13,916

2.08

%

2,132,863

9,823

1.84

%

Investment securities - non-taxable (3)

331,959

3,188

3.84

%

258,644

2,188

3.38

%

Federal funds sold and securities purchased under agreements to resell

194,351

164

0.33

%

85,716

-

0.00

%

Interest-bearing deposits in other financial institutions

2,683,656

943

0.14

%

1,200,635

487

0.16

%

Securities borrowed

1,474,421

8,524

2.26

%

1,501,389

14,445

3.76

%

Other

52,848

765

5.74

%

49,648

913

7.31

%

Interest-earning assets, gross (3)

16,962,359

123,604

2.89

%

15,722,447

137,184

3.45

%

Allowance for credit losses

(109,555

)

(155,142

)

Interest-earning assets, net

16,852,804

15,567,305

Noninterest-earning assets

1,402,216

1,420,479

Total assets

$

18,255,020

$

16,987,784

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

$

7,901,704

$

4,404

0.22

%

$

7,523,955

$

9,269

0.49

%

Securities loaned

1,422,303

6,624

1.85

%

1,398,943

12,014

3.42

%

Notes payable and other borrowings

1,233,924

7,733

2.49

%

1,150,439

8,206

2.84

%

Total interest-bearing liabilities

10,557,931

18,761

0.70

%

10,073,337

29,489

1.17

%

Noninterest-bearing liabilities

Noninterest-bearing deposits

4,509,891

3,669,230

Other liabilities

677,433

965,150

Total liabilities

15,745,255

14,707,717

Stockholders' equity

2,484,301

2,252,989

Noncontrolling interest

25,464

27,078

Total liabilities and stockholders' equity

$

18,255,020

$

16,987,784

Net interest income (3)

$

104,843

$

107,695

Net interest spread (3)

2.19

%

2.28

%

Net interest margin (3)

2.45

%

2.72

%



Three Months Ended December 31,

2021 2020

Average Interest Annualized Average Interest Annualized

Outstanding Earned or Yield or Outstanding Earned or Yield or

Net Interest Margin(Taxable Balance Paid Rate Balance Paid RateEquivalent) Details^(1)

Assets

Interest-earning assets

Loans held for sale $ 1,852,140 $ 13,708 2.96 % $ 2,760,798 $ 18,692 2.71 %

Loans held forinvestment, gross ^ 7,695,090 82,396 4.25 % 7,732,754 90,636 4.62 %(2)

Investmentsecurities - 2,677,894 13,916 2.08 % 2,132,863 9,823 1.84 %taxable

Investmentsecurities - 331,959 3,188 3.84 % 258,644 2,188 3.38 %non-taxable ^(3)

Federal funds soldand securitiespurchased under 194,351 164 0.33 % 85,716 - 0.00 %agreements toresell

Interest-bearingdeposits in other 2,683,656 943 0.14 % 1,200,635 487 0.16 %financial institutions

Securities borrowed 1,474,421 8,524 2.26 % 1,501,389 14,445 3.76 %

Other 52,848 765 5.74 % 49,648 913 7.31 %

Interest-earning 16,962,359 123,604 2.89 % 15,722,447 137,184 3.45 %assets, gross ^(3)

Allowance for (109,555 ) (155,142 ) credit losses

Interest-earning 16,852,804 15,567,305 assets, net

Noninterest-earning 1,402,216 1,420,479 assets

Total assets $ 18,255,020 $ 16,987,784



Liabilities andStockholders' Equity

Interest-bearing liabilities

Interest-bearing $ 7,901,704 $ 4,404 0.22 % $ 7,523,955 $ 9,269 0.49 %deposits

Securities loaned 1,422,303 6,624 1.85 % 1,398,943 12,014 3.42 %

Notes payable and 1,233,924 7,733 2.49 % 1,150,439 8,206 2.84 %other borrowings

Totalinterest-bearing 10,557,931 18,761 0.70 % 10,073,337 29,489 1.17 %liabilities

Noninterest-bearing liabilities

Noninterest-bearing 4,509,891 3,669,230 deposits

Other liabilities 677,433 965,150

Total liabilities 15,745,255 14,707,717

Stockholders' 2,484,301 2,252,989 equity

Noncontrolling 25,464 27,078 interest

Total liabilitiesand stockholders' $ 18,255,020 $ 16,987,784 equity



Net interest income $ 104,843 $ 107,695 ^(3)

Net interest spread 2.19 % 2.28 %^(3)

Net interest margin 2.45 % 2.72 %^(3)

Year Ended December 31,

2021

2020

Average

Interest

Annualized

Average

Interest

Annualized

Outstanding

Earned or

Yield or

Outstanding

Earned or

Yield or

Net Interest Margin (Taxable Equivalent) Details (1)

Balance

Paid

Rate

Balance

Paid

Rate

Assets

Interest-earning assets

Loans held for sale

$

2,293,543

$

64,767

2.82

%

$

2,306,203

$

74,467

3.23

%

Loans held for investment, gross (2)

7,645,292

339,548

4.44

%

7,618,723

358,844

4.71

%

Investment securities - taxable

2,493,848

47,582

1.91

%

1,897,859

49,936

2.63

%

Investment securities - non-taxable (3)

313,703

11,448

3.65

%

231,824

7,918

3.42

%

Federal funds sold and securities purchased under agreements to resell

152,273

372

0.24

%

90,961

138

0.15

%

Interest-bearing deposits in other financial institutions

2,078,666

2,942

0.14

%

1,257,902

3,165

0.25

%

Securities borrowed

1,445,464

61,667

4.21

%

1,435,572

51,360

3.58

%

Other

50,929

3,332

6.54

%

59,412

3,687

6.21

%

Interest-earning assets, gross (3)

16,473,718

531,658

3.23

%

14,898,456

549,515

3.69

%

Allowance for credit losses

(129,689

)

(122,148

)

Interest-earning assets, net

16,344,029

14,776,308

Noninterest-earning assets

1,451,928

1,537,269

Total assets

$

17,795,957

$

16,313,577

Liabilities and Stockholders' Equity

Interest-bearing liabilities

Interest-bearing deposits

$

7,722,584

$

23,624

0.31

%

$

7,397,121

$

47,040

0.64

%

Securities loaned

1,374,142

50,974

3.71

%

1,336,873

42,817

3.20

%

Notes payable and other borrowings

1,216,381

32,393

2.66

%

1,222,044

33,249

2.72

%

Total interest-bearing liabilities

10,313,107

106,991

1.04

%

9,956,038

123,106

1.24

%

Noninterest-bearing liabilities

Noninterest-bearing deposits

4,157,962

3,304,475

Other liabilities

863,976

791,002

Total liabilities

15,335,045

14,051,515

Stockholders' equity

2,435,185

2,235,690

Noncontrolling interest

25,727

26,372

Total liabilities and stockholders' equity

$

17,795,957

$

16,313,577

Net interest income (3)

$

424,667

$

426,409

Net interest spread (3)

2.19

%

2.45

%

Net interest margin (3)

2.58

%

2.85

%



Year Ended December 31,

2021 2020

Average Interest Annualized Average Interest Annualized

Outstanding Earned or Yield or Outstanding Earned or Yield or

Net Interest Margin(Taxable Balance Paid Rate Balance Paid RateEquivalent) Details^(1)

Assets

Interest-earning assets

Loans held for sale $ 2,293,543 $ 64,767 2.82 % $ 2,306,203 $ 74,467 3.23 %

Loans held forinvestment, gross ^ 7,645,292 339,548 4.44 % 7,618,723 358,844 4.71 %(2)

Investmentsecurities - 2,493,848 47,582 1.91 % 1,897,859 49,936 2.63 %taxable

Investmentsecurities - 313,703 11,448 3.65 % 231,824 7,918 3.42 %non-taxable ^(3)

Federal funds soldand securitiespurchased under 152,273 372 0.24 % 90,961 138 0.15 %agreements toresell

Interest-bearingdeposits in other 2,078,666 2,942 0.14 % 1,257,902 3,165 0.25 %financial institutions

Securities borrowed 1,445,464 61,667 4.21 % 1,435,572 51,360 3.58 %

Other 50,929 3,332 6.54 % 59,412 3,687 6.21 %

Interest-earning 16,473,718 531,658 3.23 % 14,898,456 549,515 3.69 %assets, gross ^(3)

Allowance for (129,689 ) (122,148 ) credit losses

Interest-earning 16,344,029 14,776,308 assets, net

Noninterest-earning 1,451,928 1,537,269 assets

Total assets $ 17,795,957 $ 16,313,577



Liabilities andStockholders' Equity

Interest-bearing liabilities

Interest-bearing $ 7,722,584 $ 23,624 0.31 % $ 7,397,121 $ 47,040 0.64 %deposits

Securities loaned 1,374,142 50,974 3.71 % 1,336,873 42,817 3.20 %

Notes payable and 1,216,381 32,393 2.66 % 1,222,044 33,249 2.72 %other borrowings

Totalinterest-bearing 10,313,107 106,991 1.04 % 9,956,038 123,106 1.24 %liabilities

Noninterest-bearing liabilities

Noninterest-bearing 4,157,962 3,304,475 deposits

Other liabilities 863,976 791,002

Total liabilities 15,335,045 14,051,515

Stockholders' 2,435,185 2,235,690 equity

Noncontrolling 25,727 26,372 interest

Total liabilitiesand stockholders' $ 17,795,957 $ 16,313,577 equity



Net interest income $ 424,667 $ 426,409 ^(3)

Net interest spread 2.19 % 2.45 %^(3)

Net interest margin 2.58 % 2.85 %^(3)

__________________________

(1)

Information presented on a consolidated basis. For all 2020 periods presented, information includes discontinued operations.

(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 $0.5 million and $0.3 million for the three months ended December 31, 2021 and 2020, respectively, and $1.7 million and $1.2 million for the year ended December 31, 2021 and 2020, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, January 28, 2022. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review fourth quarter and full year 2021 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 755646. 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 December 31, 2021, Hilltop employed approximately 4,900 people and operated approximately 410 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," "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 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; (ii) 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; (iii) effectiveness of our data security controls in the face of cyber attacks; (iv) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (v) changes in the interest rate environment and transitions away from the London Interbank Offered Rate; and (vi) 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005923/en/

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